STUDENTS' CORNER - 95
is an internationally significant component in logistics. Restricting it to
business and trade, transportation refers to the movement of goods from one
location to another location by air or rail or road, primarily. No business
worth the name is possible without the movement of goods, or, what is known in
business terminology, freight. Freight is generally a product. A raw material is progressively transformed
into a product which then is shipped to a customer, the end-user through many
intermediaries. All those involved in the process of production and
distribution make what is popularly called supply chain, another very critical
component of the logistics. Transportation Supply Chain refers to the movement
of the goods from the beginning to the end-user passing through many
intermediaries like wholesaler, agents, stockists, distributer, and finally the
customer who uses the product. Basically the act of getting the needed finished goods
from start location to destination is called the transportation supply chain
an English saying that goes, ‘The chain is no stronger than its weakest link’.
The strength of the chain is decided by the weakest part of it. So also, if any
one of the intermediaries in the supply chain proves defective, the supply
chain gets seriously affected. Supposing the supplier of the raw materials
required for the product delays the supply, it continuously affects the entire
process of supply chain. Production is delayed; distribution therefore does not
take place in time and finally the customer does not get his product in time.
This lapse sometimes forces the customer to shift loyalty to some other brand
thereby causing loss of business to the company.
links all the intermediate business partners and if the transport is effective,
it reduces the cost of transportation finally influencing the pricing of the
product. Therefore, the success of a supply chain depends on the efficient
management of transport. Transportation cost is critical to the cost of the supply
chain. Transportation strategy also is being discussed by companies to achieve
the lowest transportation cost. Efficient transportation helps the company in
many ways to face the competition the market poses with increasing intensity.
The lesser the transportation cost, the greater the possibility of more margin
of profit. Efficient business gets the materials from starting point to
destination cost effectively at every stage of the supply chain process.
transportation is not well planned and managed, there will be delays causing
unnecessary expenses; at times, ill-managed transport throws production
schedules into disarray creating non-productive labour and sometimes permanent
loss to the company.
We will see in our next session some benefits of