Transportation in a

5 Supply Chain

PowerPoint presentation
to accompany
Chopra and Meindl
Supply Chain Management, 6e
Timeline 1900- Shipping & Logistics
 Criteria for Ranking
Modes of Transportation
 Trends in South Africa's Logistics Costs Elements (Logistics Barometer 2016)

Improving Competitiveness through Logistics and Supply Chain Management

State of Logistics in South Africa (4/4)
 Intermodal
 Use of more than one mode of transportation to move a shipment
to its destination
 Most common example: rail/truck
 Also water/rail/truck or water/truck
 Grown considerably with increased use of containers
 Increased global trade has also increased use of intermodal
transportation
 More convenient for shippers (one entity provides the complete
service)
 Key issue involves the exchange of information to facilitate
transfer between different transport modes

© 2007 Pearson Education 14-18

© 2007 Pearson Education
© 2007 Pearson Education
 Design Options for a Transportation Network
1-Direct Shipment Network to Single Destination

2-All Shipments via Intermediate Distribution Center with Storage

Figure 14-2

© 2007 Pearson Education

 Direct shipment with milk runs.
is a regular route to pick up mixed loads from several suppliers

© 2007 Pearson Education 14-23

© 2007 Pearson Education
 Role of IT in Transportation
The complexity of transportation decisions demands to
use of IT systems
IT software can assist in:
– Identification of optimal routes by minimizing costs subject
to delivery constraints
– Optimal fleet utilization

© 2007 Pearson Education 14-26

 Risk Management in Transportation
Three main risks to be considered in transportation are:
– Risk that the shipment is delayed
– Risk of disruptions
– Risk of hazardous material
Risk mitigation strategies:
– Decrease the probability of disruptions
– Alternative routings
– In case of hazardous materials the use of modified
containers, low-risk transportation models, modification of
physical and chemical properties can prove to be effective

© 2007 Pearson Education 14-27

Spot Sourcing Model - Daily Auction/Price
Clearing/Discovery System

The benefits of same-day shipment

execution on the spot market
Reduction of empty miles by up to 13 %

Transportation cost savings of up to 10 %

Optimal freight prices with less effort

Improved delivery

Effective route planning

Rapid response to transportation market

fluctuations
A Technology-Driven On-Demand Collaborative
Freight Network

Transportation Forwarding &

Transportation
Operational Brokerage
Management
Planning Operations

Transportation
Transportation Fleet
Cooperative
Sourcing Management
Routing

Freight
Logistics
Payment, Transportation
Inventory
Billing & Intelligence
Visibility
Claims
 Quantifiable Gains from Next Gen Tech Integration

Trickle down of Cost

Reduction Based on
10-12%
Increased Efficiency Increased Efficiency
on Carriers end. Freight with Control Tower
Centralized Model
10-15% Allocation
Management
Freight Activity
Management
implementation

Upto 25%
Commission
Sharing
Contract &
Transit Doc ~5%
Management Reduction in costs
Reduction in incurred from
unwarranted overheads mismanagement of
by cutting down on docs and/or
involvement of misinformation on
intermediaries transit documentation
Transforming Future of Logistics & Transportation
 (cloud Logistics) Fastest Route to Value
Cloud Logistics was founded as an alternative to traditional slow moving, high priced
transportation management systems. TMS from Cloud Logistics offers a modern,
intuitive user experience that optimizes carrier selection, simplifies load tendering and
communication, and streamlines payment while increasing visibility and offering real-
time reporting. Save time, reduce transportation costs and gain transparency.
Our solutions make the complexities of order collaboration, communication, and
international transportation management fast, simple and beneficial for companies of
any size. The offering includes a unique user experience, customizable alerts, social
technology for business, and a mobile application designed specifically for drivers.
Robots and drones: how everything is changing
The world of robotics is being fundamentally transformed along three primary axes: increased
collaboration, increased autonomous mobility and increased intelligence. This change will
shape the future of automation and thus robotics and drones.
how the world of robotics and drones is changing, showing that our market forecasts
demonstrate that old robotics/drones, dominate the market in the short term but it will be new
robotics/drones that phenomenal growth in the long term and come to represent the majority of
the market .
 Why now?
consider major long-term developments in performance and cost of key constituent components for
emerging robots and drones such as sensors, memory, computing, electronic motors;
whilst reviewing key innovations and progress on the software
• Autonomous mobile robots (AMRs):
autonomous mobility is much more diverse than just cars for general driving. consider AMRs in
cleaning, security, retail, hospital, and other applications.
offer insights on the potential future business trends (e.g., commoditization and modularization of
hardware/software •

AMRs in agriculture:
robots and drones in agriculture. focus on the diversity of forms and functions.
intelligent robotic implements, fresh fruit picking, and robots in dairy farming.
focus on the progress in autonomous tractors
Drones:
the investment trend in drones, showing how it exhibits clear hype characteristics. how price wars consolidated the
market,
leading to an en-mass pivot towards professional hardware and also software and services
the trends in drones-enabled software and drone-as-a-service. Finally, we will discuss the technological and
legislative trends towards autonomous drones.
New Robotics and Drones 2018-2038: Technologies, Forecasts, Players.
 The new industrial revolution
(Industry 4.0)

1. Rapid manufacturing
2. Advanced robotics
3. Digitisation of supply chains
(Internet of Things / Big Data)

(Martin Christopher 2016)

Improving Competitiveness through Logistics and Supply Chain Management

The Supply Chain of the Future (1/1)
 So, what can logistics and supply chain management do to assist
businesses in South Africa to gain, maintain or improve their
competitive edge?

Transport
Warehousing
Improve
efficiency of rail Inventory
Centralisation at
and develop Skills
centres of gravity
inland intermodal Visibility in the
to allow for
terminals at supply chain to
economies of Relevant
centres of gravity assist with
scale education and
reducing
training towards
inventory
Industry 4.0 and
carrying costs
the supply chain
of the future

10

Improving Competitiveness through Logistics and Supply Chain Management

Conclusion (1/1)
 The Most Innovative Technology in the
Industry

GlobalTranz delivers a proprietary

technology platform and one-stop
integrated solution that seamlessly
connects shippers with carriers, freight
agents and GlobalTranz logistics
services.
• Real-time visibility and control of supply
chain performance.
• Lower shipping costs and reduced
overhead
• Advanced machine learning to analyze
shipping data to optimize decisions
making.
• A faster, more efficient way to facilitate
logistics

36
GlobalTranz named a Top 10 3PL by Inbound Logistics Magazine 2018

Inbound Logistics magazine, a definitive resource for business logistics and

supply chain professionals, has selected GlobalTranz as a top 10 third-party
logistics provider for 2018. This marks the 4th consecutive year GlobalTranz
has been recognized by the publication. GlobalTranz was selected for its full-
service logistics and supply chain solutions that help more than 25,000
businesses across North America gain efficiency and control of their supply
chain.

C-
37
Given the following information:
Transport 960,000 units to Eight stores , Four sources to Truck capacity (Batch size
shipped from each supplier to each store = 40,000 units
Transporting cost per load = $1,000 and The delivery cost per load = $100
Holding cost per unit yearly = $ 0.20

Answer
Number of shipments/yr from each supplier to each store=
960,000/40,000= 24
Annual trucking cost for direct network = 24 x 1,100 x 4 x 8 = $844,800
Average inventory at each store for each product = 40,000/2 = 20,000 units
Annual inventory cost for direct network = 20,000 x 0.2 x 4 x 8 = $128,000
Total annual cost of direct network = $844,800 + $128,000 = $972,800

© 2007 Pearson Education

© 2007 Pearson Education