Transportation Selection Decision, Logistics Management Video Lecture | Logistics Management - B Com

so the next decision point we're going
to talk about our transportation
decisions well there are many many modes
of transportation we can ship things by
well we can ship things by air we can
ship things by large truck or say a
smaller chocolate we call package
carriers so that's like a UPS or FedEx
local carriers or we can ship things
some things have to go by pipeline or
maybe it's a global product and it has
to go by cargo ship so there's many many
modes and we can use multiple modes it's
called intermodal transportation so many
many modes of transportation and what
product were shipping and what our
corporate strategy is are going to
dictate which modes of transportation
that we actually utilize so one element
of our decision regarding transportation
are should we have direct or indirect
shipping so indirect shipping the
product goes directly from the
manufacturer right to the retailer or
the end customer in indirect shipping or
intermediate shipping the manufacturer
may ship to an intermediary point to say
a distribution center and there could be
multiple intermediary points and that
distribution center ships then directly
to the retailer so we need to make the
decision are we trying to be very
responsive do we want to get the
materials straight from the manufacturer
maybe by FedEx out to the customer or do
we want to have some intermediate points
along the way well remember our supply
chain strategy we have to balance out
responsiveness with cost and quality so
what is our competitive strategy are we
trying to be a responsive company
so you probably don't want to put
something on a cargo ship because it's
gonna take very long to get there maybe
then you want to put it in an airplane
or we very focus on cost and we want to
ship in bulk we want to wait till we
have a full truckload to ship so these
are the things you need to think about
when you're making your transportation
decisions so everything is a trade-off
if we're trying to be very responsive
company we don't want to aggregate our
inventory so what that means is putting
our inventory in one or more central
locations why is that not going to help
us be responsive well because the
majority of our customers are further
away so that's not going to help us be
responsive also if we're trying to be
very low-cost we can't be very
responsive we've already discussed this
in our in our strategy right however we
are trying to be low-cost then maybe we
do want to aggregate our inventory
because it allows us says you can see in
some inventory models it allows us to
hold less inventory so maybe we do want
to aggregate our inventory that will
enables to be they'll cost that not
responsive so everything is a trade off
and we need to think about these
elements when we make our transportation
decisions