14 TRANSPORTATION MANAGEMENT STRATEGY

SCM 460 GLOBAL SUPPLY CHAIN STRATEGY
Dr. Alex Rodrigues
Transportation Management Strategy

Class 19 -Topics

• Topic 1:
– Understand the steps of the Strategic
Transportation Decision Making Framework

• Topic 2:
– Understand the concept of Collaborative
Transportation Management and how it contributes to improved performance

• Topic 3:
– Understand transportation challenges in the global supply chain

Transportation Management
• Roughly $500 Billion is spent on freight transportation annually
• Transportation costs make up roughly 60-65% of logistics costs
• Transportation capacity and cost management is one of the most pressing issues in operating logistics functions
• Transportation also adds value to the product by providing time and place utility for the firm’s goods. 2014 Logistics Cost and Service

2014 Logistics Cost and Service

Global Logistics

Global Logistics

Global Logistics

Global Logistics

Global Logistics

Global Logistics

Transportation Management
Macro

Strategic

Total network design decisions

Mode/carrier management decisions
Price negotiations
Dock level decisions Inbound

Micro
Supplier

Manufacturer

Outbound

Decision Flow

Decision Scope

Lane operation decisions

Operational
Customer

12

Reading 1: “…Steps to Collaborative
Transportation Management”

• Collaborative Transportation Management CTM -a holistic process focused on managing distribution operations – mode/carrier selection, load tendering, tracking, scheduling, and payment
–in a manner which ensures shared risk and benefits for all parties involved
• Primary goal of CTM is to drive inefficiencies out of the transport planning and execution process

Reading 1: “…Steps to Collaborative
Transportation Management”

• CTM involves:
– Sharing key information (i.e. forecasts, capacity plans),
– Exchanging ideas on how to improve the planning and execution of transportation processes
– Co-investing in assets that provide all parties involved with operational