Transportation Strategy SCMN 4780 TransportationManagement Transportation Management

Transportation Strategy Transportation Strategy SCMN 4780SCMN 4780

Transportation Transportation ManagementManagement

Transportation ManagementTransportation Management


Transportation Strategy Alignment Transportation Strategy Alignment

CORPORATE / DIVISION MANAGEMENT SYSTEM

BUSINESS UNIT STRATEGIC PLAN

SUPPLY CHAIN DESIGN & PERFORMANCE SPECS

LOGISTICS (LINKAGE) OPERATING MODEL

TRANSPORTATION REQUIREMENTS & STRATEGY


Integrated Management FrameworkIntegrated Management Framework

MISSION core

purpose of the enterprise

VALUES timeless guiding principles

VISION word picture of ideal future business model

BUSINESS STRATEGY SBU game plan for

successKEY PERFORMANCE INDICATORS

presentation of key / critical strategic business objectives

BALANCED SCORECARD business performance measures, goals, targets, and initiatives

CASCADING MEASURES performance measures common to all functions aligned to business objectives

GOALS DEPLOYMENT link balanced scorecard to business processes such as budgeting, reporting, compensation

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TRANSPORTATION PERFORMANCE EXPECTATIONS = OPERATING BUDGETTransportation ManagementTransportation Management


Strategic Business Unit Objectives & GoalsStrategic Business Unit Objectives & Goals(Supply Chain Examples) (Supply Chain Examples)

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1. Significantly improve on-time delivery performanceGOAL - design and implement carrier performance report card system in 2012; publish carrier targets by mode

2. Significantly reduce the cost of inbound freight per pound GOAL - Consolidate LTL freight across enterprise and negotiate new carrier contracts reducing LTL freight cost / lb. by 5% in 2012

3. Significantly reduce total number of incidents GOAL - Develop and implement core carrier driver training program in 2012 defining product safety targets and reporting requirements


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Continuous Improvement Cycle Continuous Improvement Cycle



2121stst Century Supply Chain Century Supply Chain

extraction

conversion

manufacture

assembly

distribution

retail

consumption

DOWNSTREAM

UPSTREAM

INFORMATION

PRODUCT FLOW

NODE

VALUE ADDED TO PRODUCT OR SERVICE

LOGISTICS LINKAGES



1. Customer pulls product from producer 2. Triggers producer to replenish purchased items

3. Producer then pulls materials from supplier

4. Triggers supplier to replenish supply items

5. Continue pull process upstream in supply chain

CustomerCustomerSupplierSupplier Producer Producer (Shipper)(Shipper)

2121stst Century Lean / JIT Supply Chain Century Lean / JIT Supply Chain



Objectives of Logistics FunctionObjectives of Logistics Function

LOGISTICS

Warehousing

Customer Service

Inventory Management

Transportation

Order Fulfillment

88Transportation ManagementTransportation Management


Transportation Performance VariablesTransportation Performance Variables

Performance Measure

Description

CostTotal transportation cost including freight rates, buffer inventory warehousing, equipment leasing, assessorial charges, freight forwarder fees, broker’s fees, customs, etc.

SpeedTime requirements from when the shipment is released at the supplier’s facility to the time of receipt at buyer’s receiving dock

ReliabilityAlso know as fill rate; refers to ability to deliver on time; percentage of deliveries made within the specified time window

CapabilityAbility of a carrier to move the material from supplier to buyer as required including special materials, hazardous materials, etc.

AccessibilityCapability of the carrier to pick up and deliver the shipment door-to-door



Transportation NetworkTransportation NetworkParticipants – shippers / carriers / 3PLs Participants – shippers / carriers / 3PLs

SUPPLIER CUSTOMERPRODUCER

inter / intra plant transportation

Inbound Transportation

Outbound Transportation

Reverse Logistics



Logistics Process ManagementLogistics Process Management

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Strategic business unit logistics management options

Internal Mgt employees providing

leadership & expertise

External 3PL 3rd party logistics unit

providing leadership &

expertise

Internal 3PL 3rd party logistics unit

provide leadership &

expertise



Carrier Selection Process Carrier Selection Process

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PLAN

DO

MEASURE

SETTLE

• Benchmark• Modal Rate Plan • Routing Guides• Optimization

• Carrier Selection • Negotiation• Shipment

Execution

• Freight Database Management

• Report Cards Issued

• Freight Audit and Payment


Aggregation

Consolidation

benchmarking provides … • company's comparative performance to that

of other companies using both objective and subjective criteria

• strategic positions of competitors for use as reference points in the formation of decisions and objectives

• performance assessment for a specific activity relative to the methods of a competitor doing the same thing

• comparative methodology for lowering costs, reducing defects, increasing quality, and / or improving outcomes linked to operational excellence

Benchmarking ProcessBenchmarking Process



Transportation Improvement Initiatives Transportation Improvement Initiatives



Transportation Mode ChoicesTransportation Mode Choices

Mode Strengths Limitations Primary RolePrimary Product Characteristics

Example Products

Truck

Accessible Fast & versatile Customer service

Limited capacity High cost

Move smaller shipments in local, regional, and national markets

High valueFinished goodsLow volume

Food; Clothing; ElectronicsFurniture

Rail

High capacity Low cost

Accessibility Inconsistent service Damage rates

Move large shipments of domestic freight long distances

Low valueRaw materialsHigh volume

Coal/cokeLumber/paperGrain; Chemicals

Air

Speed Freight protection Flexibility

Accessibility High cost Low capacity

Move urgent shipments of domestic freight and smaller shipments of international freight

High valueFinished goodsLow volumeTime sensitive

ComputersPeriodicalsPharmaceuticalsB2C deliveries

Water

High capacity Low cost International

Slow Accessibility

Move large domestic shipments via rivers, canals and large shipments of international freight

Low valueRaw materials Bulk commoditiesContainerized finished goods

Crude oil; Ores; Minerals; Farm Products; Clothing; Electronics; Toys

Pipeline

In-transit storage Efficiency Low cost

Slow Limited network

Move large volumes of domestic freight long distances

Low valueLiquid commoditiesNot time sensitive

Crude oilPetroleumGasoline; Natural gas



Carrier Negotiating Approach - OceanCarrier Negotiating Approach - Ocean



Enterprise Resource Planning (SAP) Enterprise Resource Planning (SAP)



Transportation Management Software Transportation Management Software


SAP Transportation Management software helps companies to efficiently, quickly and accurately orchestrate the movement of goods. It creates an environment that simplifies, automates and interconnects transportation processes, improves order management, planning and consolidation and optimizing inbound and outbound shipments while taking into account real-world constraints and costs and penalties.


SAP Transportation Management SAP Transportation Management



Transportation Management DashboardTransportation Management Dashboard



Logistics Management SalariesLogistics Management Salaries

Transportation ManagementTransportation Management2121


Emerging Transportation Model Emerging Transportation Model


A. ________________

B. ________________

C. ________________

D. ________________

E. ________________


SCMN 4780 Transportation Strategy Test 3 SCMN 4780 Transportation Strategy Test 3


• Multiple Choice • True / False• Matching • Short-Answer

• GJP will distribute schedule for final team deliverable submission

Documents

Transportation Strategy SCMN 4780 TransportationManagement Transportation Management