ch07 Transportation in the Supply Chain.pptVIP

S. Chopra / Transportation Chapter 7Transportation in the Supply Chain Outline The role of transportation in the supply chain Factors affecting transportation decisions Modes of transportation and their performance characteristics Design options for a transportation network Trade-offs in transportation design Tailored transportation Routing and scheduling in transportation Making transportation decisions in practice Factors AffectingTransportation Decisions Carrier (party that moves or transports the product) Vehicle-related cost Fixed operating cost Trip-related cost Shipper (party that requires the movement of the product between two points in the supply chain) Transportation cost Inventory cost Facility cost Transportation Modes Trucks TL LTL Rail Air Package Carriers Water Pipeline Truckload (TL) Average revenue per ton mile (1996) = 9.13 cents Average haul = 274 miles Average Capacity = 42,000 - 50,000 lb. Low fixed and variable costs Major Issues Utilization Consistent service Backhauls Less Than Truckload (LTL) Average revenue per ton-mile (1996) = 25.08 cents Average haul = 646 miles Higher fixed costs (terminals) and low variable costs Major issues: Location of consolidation facilities Utilization Vehicle routing Customer service Rail Average revenue / ton-mile (1996) = 2.5 cents Average haul = 720 miles Average load = 80 tons Key issues: Scheduling to minimize delays / improve service Off-track delays (at pickup and delivery end) Yard operations Variability of delivery times Air Key issues: Location/number of hubs Location of fleet bases/crew bases Schedule optimization Fleet assignment Crew scheduling Yield management Package Carriers Companies like FedEx, UPS, USPS, that carry small packages ranging from letters to shipments of about 150 pounds Expensive Rapid and reliable delivery Small and time-sensitive shipments Preferred mode for e-businesses (e.g., Amazon, Dell, McMaster-Carr) Consolidation of shipments (especially important for package carrier