The activity of transportation decides the productivity of moving items efficiently. The progress in strategies and management standards enhances the moving load, conveyance speed, service quality, operations costs, the use of facilities and energy savings.Transportation takes a critical part in the control of logistics. Looking into the present condition, a solid framework needs an unmistakable edge on logistics and proper transport actualises and methods to connect the producing strategies. The main objective of this project is to characterize the part of transportation in logistics and supply chain for the reference of further changes and improvements .
Supply chain management is the actual planning and management of all the activities including flow of goods and services, transportation of raw materials and finished goods from the initial position till the the reach of customer.It includes all of traditional logistics as a part of it . (Marion, 2018)
Logistics management being an integral part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. (cscmp, 2018)
Significance of project
Organizations today need to manage new monetary parameters. Political and economical moves happen faster than past.. Trading zones are developed everywhere throughout the world. Globalization turned into a summed up marvel that has pretty much nullified a few outskirts. Because of specialized changes in technology the distance between the market have additionally contracted, and the world can be viewed as a town. In such a situation, Logistics activitiess can no more be viewed as conventional transportation method. The new logistics era needs to help monetary development of organizations and in addition the marketing and assembling or manufacturing activities because of expanded worldwide rivalry and global competitions in the corporate world. Suppliers, manufacturers ,clients and assembling plants are part apart and are located in wide geological region; this implies there is a more complicated transportation flow .
Project aims and Objective
The main purpose of this project is to analyse the importance of transportation management in the logistics and supply chain , and also to analyse the distribution network .
This project is designed with the help of statistics and example.
The main objective of this project is to understand the transportation management system in a logistics and supply chain firm and also to get deep knowledge about the integrated transportation system and how its being changed or updated over the years. The literature review also preview the importance of sustainability, integrity and importance of lean management in transportation of logistics. There is also a detailed description on the need for digital tracking in transportation system.
Organisation of the study
This project is basically designed to understand the importance of transportation management system and its various forms with respect to a logistics and supply chain firm.
This project initially goes through the definition and meaning of transportation system followed by its types and example and a detailed overview of sustainability and lean in this sector followed by the secondary data is analysed based on the statistics and graphs .
Limitations of the project
The “ potential liability and the transfer of that liability are key consideration for transport providers and warehouse operations “ (coffinmew, n.d.)
The internal facts and drawbacks of this transportation system was initially difficult to obtain as the statistics of a company often hide the reasons behind the significant downfall . Regarding the analysis of logistics customer service a detailed logistics customer service won't be analysed.
The main outcome from this project will be the greater understanding of transportation management system in logistics field followed by its relevance ,types, drawbacks , statistics with reference to examples.
REVIEW OF LITERATURE
Logistics is a broad concept that is basically the detailed analytical observations of organisations and its implementations of a complex operation . According to Vogt et al. logistics in the business world have developed fast in the last twenty years, the logistics managers have a much wider and more complex position in the business world than before .
Logistics is the process of planning implementing and controlling the efficient effective flow and storage of goods services and related information from one point of origin to another point of consumption for the process of confirming the customer requirements. (Tilanus, 1997)
Generally logistics is the actual management of the flow of goods, raw materials, finished products from a particular point of origin to the point of market with respect to the availability for consumers and all these are designed in order to easily meet the need of customers or of any cooperation. In other words logistics is used more often with reference to the process of coordinating and moving resources from one point to another destination.
The logistics as a business is a wide subject that might include the following functions:
Supply chain management is recognized as the procedure of manufacturing and logistics of a company, which must take location from the commencing of procurement of raw substances in order to create merchandise and the remaining transport of such merchandise to their distribution centers and eventually their points of sale.
The practices of SCM are no longer only benefited by using the reduction of spending, however also via incrementing profitability in investments, commercial growth and reducing the general fee of doing business. Businesses confronted with overruns, due to bad supply chain management have a greater propensity to being affected with the aid of monetary crises; therefore the difference between a struggling organisation and a successful one can normally be viewed in an ample and consultant use and protection of their grant chain from beginning to end.
Relation between transport and logistics
Transportation is the driver of logistics and logistics is a part of supply chain management network Logistics requires planning, transportation is just the mode to execute the planning, when getting freight from one point to other. Transportation can be defined as the act of moving goods or people from an origin to a particularly required destination with respect to time and utilities.
Clearly, they are not the same thing, but transportation is just simply a part of logistics. When it comes to logistics, logistics executives must make further decisions beyond the mode of transportation to include:
Importing and Exporting Regulations
Freight Damage Claims
Working & collaborating with other executives within the supply chain
Managing vendors and partners
Responsible for mitigating risk and mitigating expenditures
Transportation and logistics
First party logistics providers they are single service providers in a specific geographic area that are mainly specialized in certain goods or for some kind of transportation methods such as shipping methods. Examples are: carrying companies, port operators . The logistics department of a particular producing firm can be a first party logistics provider if they have own transport and inventories . (Leeuwen, 2014)
Second party logistics providers they are the service providers which provide their specialized logistics services in a larger area in terms of geography than the first party logistics . Often there are some kind of contracts between the second party logistics and the customer, which regulate the conditions for the transport duties that are mostly placed. The second party logistics provide own and external transportation resources such as trucks, forklifts, etc. for handling of cargo or activities. Second party logistics arose in the course of the Examples are: courier, express and parcel services; ocean carriers etc.
Third party logistics has a broad meaning that can be applied to any service contract that involves storing or shipping things. A third party service might be a single service such as transportation or may even be warehouse storage . (Walker, 2011)
Benefits of Transport management system
A thoroughly deployed transportation administration system can gain corporations in the following ways:
Transportation order planning and execution. The transportation management system integrates well with companies order management, warehouse administration and other systems, relationship management , supplier relationship administration and different systems for managing transport demand. It enables users to format and manipulate both global and domestic shipments and determines the most inexpensive and most environment friendly carrier and mode using better route planning, load optimisation, provider combine and mode selection.
Reduce invoice errors. This can be done by automating the freight charge and audit processes, customers can limit mistakes that may also occur from manual procedures.
Transport intelligence. Most transport management system software programs provides customers great insights and reporting skills that furnish them with detailed visibility into freight records and metrics to help pinpoint any discrepancies. With this data, customers can make the essential decisions.
The way goods are moved around the country hasn't changed all that much over the years. Ships, trains, trucks and planes for smaller shipments remain the primary methods of shipping. Things that have changed is the size the shipments and the way to track down it with the help of software .
How to Minimize Transportation Costs
The best way to reduce the transportation costs is by eliminating unnecessary transportation. Transportation cost can be reduced by consolidating shipments, buying partially assembled products from vendors and reducing the number of trips needed to ship in raw materials.
The best way to reduce transportation cost is by having work stations within the factory close to each other minimizes material transportation thereby will help in reducing cost , which is a non-value-added labor cost. Consolidating transportation service providers increases the volume each transportation firm provides and can allow for a negotiated volume discount. (Murray, 2017)
Mitigate Transportation and Logistical Risk
Uniting shipments builds the danger of a lost shipment conveying a on a mechanical production system to a stop. An unexpected shortage will close down creation. This requires a protected inventory network. The orders must have the capacity to be conveyed rapidly and quickly, with a base risk of postponements. This is the reason numerous providers fabricate production lines or circulation focuses near their significant providers. On the off chance that the provider is near to, a shutdown of air movement or a gigantic automobile overload crosswise over town won't keep parts from being strolled over. Providers that are not found close by must have numerous reinforcement courses for their item.
Terms associated with transportation system
This is the time taken from receipt of customer order through to delivery.
It is the movement of goods or products from the producer or manufacturer to the user or customer.
According to Coyle et al.,37 “The truckload carrier provides service to shippers who tender sufficient volume to meet the minimum weights required for a truckload shipment and truckload rate or will pay the required amount.” (jafrate, 2017)
On the opposite when a truck cannot be fully loaded, the devoted term for that phenomenon is Less-Than-Truckload. Less-Than-Truckload carriers provide service to shippers who tender shipments lower than the minimum truckload quantities.
It is the geographic direction in which freight flows or moves from producing locations to areas of consumption.
Modes of transportation
Sea liners are mammoth ships used to transport products. These ships navigate general courses on settled schedules. Liner vessels incorporate compartment ships, mass bearers and tankers. container ships convey the vast majority of the world's products, while mass bearers transport crude materials like coal or iron mineral, and tankers transport oil, oil and different synthetic substances.
There are two principle choices with regards to transportation products by rail.
Carload benefit: If your business is found near a rail station, you can stack cargo straightforwardly onto or into rail autos and have it conveyed to its goal.
Multi-purpose benefit: This includes having your cargo stacked into trailers at that point trucked to the rail station where the cargo is stacked onto the prepare. At the last goal, trailers are stacked back onto another truck and conveyed.
A semi or trailer truck, otherwise called a cargo truck, transports things bigger than 150 pounds. On the off chance that your shipment surpasses 10,000 pounds, a whole cargo truck is required to move it. A few organizations likewise offer a LTL (Less Than a Truckload) alternative. In this delivery circumstance, you will pay for the space you utilize.
Shipments via plane will cost your organization the most yet will convey merchandise the speediest. Light shipments that need to arrive rapidly will profit by a plane shipment.
Integrated logistics management system
Transportation management is the most important coordinations thing in logistics . Expenses related with transport are often more than one-fourth of the general coordinations costs in logistics (Kisperska-Moroń)
Transportation management administrators in the organization are in charge of the choices, regardless of whether to utilize own transport or outer, specifically they are in charge of the decision of a specific transporter and the particular course of transporting payload.
The worker has to know the cost of transport, the relevant standards of law as far as guidelines and controls concerning the transportation, and furthermore can oversee human and money related assets. Administrators ought to have regards to the objective of coordinations in transportation and general business (Dima, 2012). Administration decides the decision of the branch, sort and technique for transportation . The decision of a specific transport mode relies upon the physical parameters of load (width, tallness, length). Weight load will choose about the choice of vehicles conveying limit. Transport ought to be described based on reliability - burdens ought not get either past the point of no return or too soon. An imperative component is the speed of the carriage. Specifically, the acknowledgment recently arranges, transport of live living beings or records. For the vehicle director is likewise imperative the capacity to control and screen the activity, this applies especially to shipments of high esteem (Rydzkowski, 2005).
ROLE OF INFORMATION SYSTEMS IN TRANSPORT LOGISTICS
It has already been mentioned that the information forms the “nervous system” encircles a specific company, while relating it with the environment.
The nervous system ring vital is more often referred to as the information system it is an essential element in any operating company at present (Australia, 2001) . The steps of each process in information can be quite easy to distinguish, at least because of course, type and nature of the information that they acquire or generate.
Following are the informations required to gather in order to digitalise the transportation system
- Information based on the mode of selected transport such as road, rail, sea or air
- Information regarding loads such as size, type, quantity, weight, height
- End to end Information regarding senders and receivers such as name, organization name, address
- information related to the Start and end time such as the date of dispatch of the cargo and the date of receipt of the load
All the above information systems are integrated through an information chain that includes the capture, communication, processing, distribution and use of information by users. Therefore these users may be the regulatory manager entities or may be drivers carrying passengers or goods. Figure 1 outlines the information chain described above.
The information system of transportation system in logistics works in 4 phases the primary phase is to gather the data in data acquisition and then process the data based on both internal and external factors and finally make use of analysed data for a better transportation system. (Julian, 2013)
In order to enhance the transport forms, numerous innovations in the readiness and transmission of data have been made. To ran the transport procedure easily, organizations are progressively utilizing present day instruments of data frameworks. This need prompted the production of "telematics", a term which is a blend of two words: "broadcast communications" and "data innovation", and as per the definition given by the New Encyclopedia of Universal means media communications division managing the exchange, trade or dispersal of data as steadfast property picture of alphanumeric content, logos, composing, illustrations or photos. Telematics likewise implies media communications arrangements, PC and data and programmed control arrangements used to address the issues of upheld physical frameworks - coming about because of their occupations, foundation, association, procedures, support and administration - and incorporated with those frameworks (Wydro, 2005). In like manner utilization telematics implies gadgets and frameworks gathering information for the transmission of their separation utilizing telematics and change them into data for the last client (Müller, 2003).
Following are some of the advanced communication used in transportation system of logistics
- Detectors or sensors makes it possible to measure the remote means of transport
- Terrestrial and satellite communications use to enable the transmission of information over long distances
- Electronic and wireless technology for exchanging the information
- Databases and data warehouses abatement system to enhance proper transportation.
- Real time information systems
information systems used in the processes of transport can bring tangible benefits in the form of:
- Increase transport efficiency,
- Better financial results,
- More efficient coordination in the exchange of information,
- Optimal use of transport and improving the quality of transport,
- The possibility of remote monitoring conditions along the route,
- Optimize the timetable and plans of drivers
LTL-TMS is a system professionally designed for LTL Transportation Company. I some of the functions is related to storage & bulk plan, network cooperation, profit sharing, upload and unload on the way, SMS, bar-code, cost sharing.
The system monitors the flow of cargo, capital and information, and manages covering every process of LTL Transportation including receiving cargo , cross dock, stock-in and stock-out, distribution, partner transfer, loading and dispatch, GPS, uploading and unloading, pickup, damage and discrepancy, payment collection, freight settlement, etc.
Following are the advantages for LTL transportaion business:
Comprehensive Solution for Access Control
Event driven management
Station or Branch absolute operation in system
Supporting brokerage mode
Payment Collection recording
Profit-share and automatic account settlement & Reconciliation
Discrepancy and Damage Management
Network structured and synchronization
Comprehensive Strategic Solution
User-defined report format and system setting
Vehicle tracking system
Vehicle tracking framework has outperformed its underlying contributions of area details of bearers from multiple points of view. The following has turned out to be more proficient as well as the best vehicle following frameworks are giving highlights which are empowering transporters to "View" trips as an individual. A transporter, in the journey of guaranteeing greatest asset usage, couldn't request more. Vehicle following frameworks are coming up with thorough answers to discover a path for everything about by the transporters..
It is critical to watch out for the administrations given by the best vehicle tracking framework in the coordinations business. Each element portrays an answer as well as focuses at an issue region for which it is conceptualized.
While "associated with transportation " interconnection is the popular expression for 2017 in the tech business, this guides to the inquiry concerning how internet being the motivation for organizations are arranging to use this as a stage to get online vehicle tracking framework. While a SAAS based vehicle tracking framework in all accounts is a win-win circumstance for both, the vehicle tracking specialist organization and transporter, it likewise accompanies included obligation of guaranteeing digital security for the following framework. Since the tracking framework is for the most part coordinated with the center verticals of the business, bargaining on the security of one means having none by any stretch of the imagination. This implies while it appears an online vehicle tracking framework can be the best vehicle tracking framework that can request in an associated world, which have to guarantee that entire transportation administration framework is ensured at the lead position.
With collaborative business works on coming in drift, 3PL mix is turning into a requirement for the best vehicle tracking frameworks. Transporters, keeping in mind the end goal to make cargo transportation more financial, are attempting to work together with various trading accomplices for last mile conveyance. In any case, this doesn't imply that the control over cargo following can be imperiled. Thus a powerful vehicle tracking framework with 3PL reconciliation guarantees that highlights, for example, location details can be given which incorporates different outsiders supporting the coordinations chain.
Value of Vehicle tracking system in business
On a bigger scale, the evaluated affect from a portion of the best vehicle tracking framework can be straightforwardly obvious in the enhanced tasks of the fleet. With the two principle segments, fuel and bearer, conveying higher ROI for a similar contribution with the incorporation of vehicle tracking framework, the positive effects will undoubtedly surface. In any case, it is imperative to pinpoint the principle issues which you are expecting to illuminate with a vehicle tracking framework. This is to assess and investigate the ROI for the ventures made on outfitting your fleet with extraordinary compared to other vehicle tracking framework.
IMPROVING FUEL EFFICIENCY
Vehicle tracking framework helps in checking the driving behaviour which prompts overabundance utilization of fuel. sudden quickening, forceful braking and comparable rash driving practices inflict significant damage on the fuel utilization and additionally motor effectiveness of the bearer. Recognition and controling these driving practices helps in enhancing the vehicle fuel effectiveness which brings about the higher yield. With the assistance preventive upkeep innovation arrangements empowered vehicle following framework
MONITORING DRIVING BEHAVIOUR
As much as vehicle tracking framework contributes in expanding the fleet effectiveness for the transporters it can turn into somewhat obtrusive for driver security. This is one reason drivers are at times hesitant in adjusting to driving conduct checking innovation which accompanies vehicle tracking frameworks. In any case, the positives impacts of vehicle tracking framework can turn the tables for drivers. Boost for incredible and safe driving abilities is an awesome method to recognize the better execution by drivers and aides in keeping them persuaded. It likewise helps in identification of few driving characteristics, for example, hard cornering and cruel braking which may have imbued in the driving style without cognizant criticism from the framework.
REAL-TIME STATUS UPDATES
This helps in delivering instant instructions to the drivers after taking real life scenarios into account. This gives the fleet managers greater control over the operations and can save the day in many unexpected situations that are encountered by the carriers. Idling, unauthorised usage and speeding can be addressed in a much more vigilant way by directly getting in touch with the carrier in real time. This also empowers the fleet managers to minimise the customer query by providing the auto updates with real-time status.
Course enhancement is a standout amongst the most confided in methods utilized by the transporters to produce greatest ROI for their assets put resources into travel. Yet, with the evolving time, course streamlining has likewise experienced numerous adjustments which have enhanced its effectiveness and execution. Dynamic steering is a standout amongst the most mainstream course improvement arrangements which has turned into a pattern because of the development of associated vehicle tracking frameworks.
ASSET SECURITY & DRIVER IDENTIFICATION
Vehicle tracking framework probably won't be as successful as it plans to be on the off chance that it can't give important insight about the vehicle driver as well. Resource security or transporter security runs as an inseparable unit with legitimate distinguishing proof and in addition confirmation of fundamental licenses for the travel. Driver recognizable proof supplemented by picture and information recovery highlights causes the fleet chiefs to guarantee that the right employments are being dispensed and taken after. It additionally helps in cross confirmation of the timesheets and truck action detailing for the significant occasions saw amid travel. Trackers, sensors (on account of chilly inventory network) and burglary identification instrument which can task focuses guarantees that the security, and in addition contravention measures, are dependably set up amid travel.
TRUCK ACTIVITY REPORTING WITH MAP REPLAY
Route Course enhancement through information investigation and anticipated the conduct of unequivocal parameters is an attempted and tried method for guaranteeing higher productivity. In any case, the basic difficulties looked amid travel can some of the time be altogether different than what they look or may not look like in information investigation. Hence having a point by point report about the truck action encourages the transporters to recognize what are the occurrences which can supplement or upset the opportune consummation of treks. An elucidating map replay which is frequently shown in the breadcrumb configuration to propose the stream of the outing is critical in breaking down the diverse periods of the trek. This increases the value of the arranging and in addition routeing process for next excursions.
We are halfway through 2017 and Electronic Logging Device (ELD) mandate is going to be a reality in the next 5 months. ELD compliance is basically driving the logistics and transportation industry towards a more connected transit period. With an electronic device which will be making data updating and retrieval as easy as it could be, excuses for not carrying out the necessary permits will be far lesser.
LEVERAGE ON INSURANCE PREMIUM
Fleet proprietors are setting aside to 35% in the protection premium paid for the transporters which are bolstered with vehicle tracking framework. Since the entire thought behind going for the best vehicle following framework and not bargaining on quality with any arbitrary vehicle following framework is organizing security. The protection premium is ascertained on the danger of burglary or mishaps for the vehicles. In nearness of a vehicle following framework, the odds of the vehicle getting in a disturbing circumstance can be countered by an incite reflexive activity to protect the vehicle. Henceforth the protection premium drops at the same time with the hazard.
Sustainability in transportation management
Sustainability is a way of maintaining change with respect to environment in a very balanced way .In this process the exploitation of resources, the investments, development of new technologies and institutional changes are all in harmony with the nature and enhancing both current and future potential to meet the needs of human beings and their aspirations. The main purpose of sustainability is sustainable development and that includes the following : environment, economic and social. There are certain Sub-domains of sustainable development that have been considered as : cultural, technological and political. In other words Sustainable development is the development that tends to meets the needs of the present without compromising the ability of future generations to meet their own needs. (global footprints, 2009)
Over the last few years there has been significant efforts that have been focused on developing sustainable and modern transportation to overcome pollution problems and crude oil shortages. In various countries transportation agencies along with several standard organizations, have proposed different types of energy sources in order to replace the existing resources such as hydrogen, biodiesel, electric, and hybrid technologies etc to achieve a more ecofriendly and sustainable environment. (Mehar, 2017) .
Sustainability model of toyota
Toyota being the worlds one of the most popular and successful company have got a greater solution to the world's greatest challenges, such as those addressed in the United Nations Sustainable Development Goals. (Husain, 2018)
When it comes to sustainability the Toyota has a broad portfolio such as
By 2017 they have successfully reached more than 10 million cumulative units of hybrid vehicle (HV) sales globally, which even includes the latest plug-in hybrids. (wallop, 2018)
Cars like Prius Prime, Toyota and Lexus now have 14 hybrid models available globally.the Toyota's hybrid technology has helped save more than 7.66 billion gallons of gasoline worldwide and resulted in an estimated 77 million fewer tons of CO2 emissions, since 1997 Toyota has challenged itself to reduce vehicle emissions of CO2 by around 90% in comparison with the levels in 2010 , they expect to achieve this goal by 2050.
Benefits of Adoption
Toyota's model can be adopted by various car manufacturers to maintain sustainability and to ensure the availability of resources for future generations.
On adopting sustainability strategy the Volkswagen not just improves reputation but also gain some value . Eventually all these will help in increasing the image of the company thereby can help gaining customers. It is a good opportunity for the transportation companies to adopt this model to regain the reputation of the firm and also to overcome the sustainability issue
Cost of initializing the toyota model
The sustainability matters the most then the cost factor the main cost of introducing new hybrid vehicle is by improving the technology and that is initially a very costly procedure . But the need of the hour for other companies is to overcome the sustainability issue and win the heart of customers .
Based on the report from a 2010 survey conducted by the U.S. Environmental Protection Agency (EPA) have found that roughly around three quarters i.e about 75 percent of greenhouse gas emissions in the manufacturing industrial sectors have originated from the supply chain sector . which makes for a great deal of both resource investment and harm to the global environment at the hand of manufacturing and supply companies.
In addition to this the report encourages the supply chain and logistics sector to focus on sustainable transportation system.
Many industrial analysts believed that the supply chain has got negative impact on the environment and that will only worsen unless manufacturers and suppliers take significant steps to curb their carbon footprint.
Sustainability in Consolidating Orders
Consolidating the orders and utilizing more flexible shipping strategy and delivering windows will help reduce the overall amount of shipments but at the same time it will also help reduce the amount of movement within the dock that will ultimately increase the efficiency.
Sustainability by Optimizing Load Configurations
In order to attain sustainability under transportation management system then there has to be certain load optimisations although this may seem like a small concern, but in practical the products are loaded into a vessel - the order, the layout, etc - has a huge impact on how much product suppliers can ship at any given time. Based on the load configurations of container, the container fill-rates, fuel consumption, rates of emissions, and overall transportation efficiency plays a major role in attaining sustainability
Sustainability Utilizing the Data
The data available to manufacturers from the massive banks of data can be used to analyse the uncertainty in the context of sustainability and can obtain the possibilities to achieve it with continuity . (Ostdick, 2016)
The logistics providers and shippers are renewing their focus on sustainability to build the manufacturing giants of tomorrow.
Importance of sustainability in transportation system of logistics
There have been lots of argument regarding the sustainability initiatives and are solely believed to be the result of increasing government regulations.
Based. On the reports of Modern Materials Handling Staff it is clear that the consumers are willing to pay an additional 5 percent for a product that is being processed by shippers that have implemented sustainability in logistics measures. And this report has also come up with findings such as 76 percent of consumers are willing to wait an extra day for climate friendly transport options.
Obstacles to Sustainability in transportation system of logistics
Reluctance to change
Shippers have grown abundantly to know how things are done in the modern world. Unfortunately this has led to a reluctance to change their currently practising processes, which have always shown to be profitable, in favor of sustainable ventures. Shippers do not have a decision but a duty to embrace change. (robinson, 2016)
Sustainability in third party logistics
Despite of the global recession of 2008 and 2009, many large third party logistics companies have changed their focus towards sustainability companies have increased their respective commitments to developing greener practices and creating new changes for better tomorrow
3PL Commitment to Sustainability
Based on the findings from 2009 survey none of the ceo's had scaled back their company's commitment to sustainability goals as a result of the recession.
According to the survey around 63% of CEOs surveyed reported expanding the existing sustainability programs for upcoming year.and 71% of CEOs surveyed indicated they had launched completely new sustainability initiatives during the same time frame.
Important Short-Term Sustainability Challenges Faced by 3PLs
1) Balancing sustainability efforts with customer expectations for low-priced 3PL services
2) Identifying appropriate environmental targets
3) Establishing sustainability priorities within the company
4) Generating accurate company information related to current sustainability practices
5) Developing an organizational sensitivity to sustainability issues
“In the year 2008 39 CEOs completed surveys via an Internet-based questionnaire. Companies participating in the annual survey include: Cardinal Logistics, Caterpillar Logistics Services, CEVA, DSC Logistics, DHL Exel Supply Chain, Genco, Kuehne + Nagel Logistics, Landstar, Menlo Logistics, NYK Logistics, Panalpina, Penske Logistics, Pittsburgh Logistics, Ryder, Schenker, Schneider Logistics, Transplace.com, UPS Supply Chain Solutions, UTi, Wincanton and YRC Logistics. In total, these companies are responsible for generating approximately $60 billion in revenue”. (bloomberg, 2010)
Lean management for transportation system
Lean is the manner by which a legitimately outlined and working supply chain network should work. A lean supply chain network process has been streamlined to totally reduce and eliminate the dispose of waste or non-value added activities to the aggregate inventory network system and to the items moving inside the supply chain . Example Toyota's lean manufacturing system offers two concepts that have changed the way modern business operates Lean Manufacturing Concept Highlighting and visualizing problems and Just-In-Time Productivity improvement. (toyota Asia, 2018)
Lean management is actually an approach to run a organization that wish to continuous improve based on the downfall and achievements . Based on a long-term approach to work systematically needs to achieve small and incremental changes in processes in order to improve the efficiency and quality. Lean management could also be defined as a systematic approach to reduce waste, minimise inventory, decrease flow time and prevent bottlenecks to deliver the final product or service with more value and great quality to customers and achieve their satisfaction (Chiarini, 2012)
Lean management in manufacturing is a philosophy derived mostly from the Toyota Production System usually called as TPS, it is an integrated socio-technical system which comprises its managemental philosophy and practices.
The primary focus of Lean management seeks to eliminate any waste of time, effort or money by identifying each step in a business process and then revising or cutting out steps that do not create value. Following are some of the key concepts of Lean Management system Value Stream Mapping (VSM), 5S, Just In Time (JIT), Kaizen, Six Sigma, Total Quality Management (TQM), Kanban . The principles of lean management in manufacturing was applied in the Toyota Production System (TPS), that have been practiced by the Japanese auto industry for over 60 years.
The five main lean manufacturing principles for transportation system are as follows :
Specify Value – in the point of view of the Customer
Identify and Create Value Streams
Make the Value flow from raw material to Customer
Pull Production not Push and Strive for Perfection
Lean Manufacturing practices have become a very important and common aspects of production.
In practical it's the need of every organization, but Lean manufacturing is being applied to other sectors beyond manufacturing as well. In the Lean Management system the techniques can have a tremendous impact on logistics , supply chain and transportation by reducing waste and improving efficiency.
The transportation management processes should be integrating with the Lean implementation within a company .
In order to implement the lean in transportation system the logistical sector need to support the following Rights of Lean Management:
1. Right Materials- only the necessary materials need to be transported
2. Right Quantity – the right materials need to be transported in right proportion
3. Right Time – the right quantity and right materials need to be transported in right time.
4. Right Place – the right materials need to be transported to the destination at the specified time
5. Right Source – transportation of goods and materials need to be authenticated between the initial and final source.
6. Right Price – price for transportation should not be higher then accurately affordable
7. Right Service – good service by the logistic provider can be achieved by following the above basic criteria's
The transportation system can be optimized with Lean techniques, and can be benefitted for Lean Transportation for the company.
Optimization of Transportation with Lean Management
The main purpose of introducing lean manufacturing in logistical sector is to increase the opportunities for improving the existing and even the best of current practices to avoid wastage Most of the transportation chain contains a lot of costs and waste, and these can be significantly reduced with the implementation of certain Lean techniques.
Following are the different ways to incorporate the Lean Transportation within the logistics and supply chain
1. Customer Centric Strategy
An integrated customer centric method with proper transportation strategies can lean to the implementation of lean in transportation . Product delivery methods and timeframes should not depend upon transportation strategies.
In order to improve customer satisfaction and quality of service the transportation system in logistics need to reduce the time from order to delivery . Proper Understanding of customer expectations and demand also reduces inventory risk and operating cost of inventory management.
2. Removal of Excessive Waste in Transportation
One of the main intention of lean management is to remove the wastage of time and resources the existing challenges are assumed about size-based cost efficiency, where frequent inbound and outbound movement of smaller batches is considered more expensive than transporting larger lots. This poses a challenge for transportation managers but transporting any more than necessary adds to transportation waste.
Along with reducing shipment sizes, inventories, and transportation costs, Lean Transportation also minimizes lead times. Faster shipments and deliveries lead to higher customer satisfaction, which is a key factor in any organization's success.
3. Measurable Performance Capability
logistics service providers need to be treated as strategic as a part of lean techniques rather than transactional partners. Organizations have been encouraged to work with quality carriers keeping in mind for sustainability and transportation providers need to offer dependable service and continuous improvement according to measurable levels of performance capability.
Regular transportation can lead to collaboration with shippers which requires trust, teamwork and cross-function thinking. A commitment to servicing organizations in this manner can lead to quality long-term relationships.
4. Productivity for Cost Efficiency
The transportation cost structure is divided into unit costs and productivity costs
Optimizing productivity costs instead of focusing on carrier rates allows organizations to minimize the wastage of materials, time and effort .It's essentially a win-win for both. The latter provides a larger opportunity for cost reduction according to Lean, so transportation managers should focus on these.
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