Geographic information systems in supply chain route optimization

Supply Chain Logistics

SUPPLY CHAIN

The objective of this study is to provide an example of the relationship between the four supply chain objects: (1) products; (2) facilities; (3) vehicles; and (4) routes and what tradeoffs can be made between these four objects to get lower overall supply chain costs.

Logistics Strategies

It is reported that logistics strategies and specifically decisions about transportation "can be considered as key factors to increase supply chain effectiveness." (, p. 1) Transportation services play a key role in the supply chain seamless operations and specifically "moving in-bound materials from supply sites to manufacturing facilities, repositioning inventory among different plants and distribution centers and delivering finished products to customers." (Geospatial World, 2014, p. 1) Reported is that there is spending by organizations on new technologies and software that provide for "seamless integration of the supply chain, to increase overall supply chain profitability." Geospatial World, 2014, p. 1)

II. Geographic Information Systems

It is reported that today's companies are using Geographic Information Systems (GIS) "as a key component in their supply chain software." (Geospatial World, 2014, p. 1) This type of mapping software makes provision of an easy way for data to be visualized b y users as well as providing more clarity than raw data. Four primary decision areas in supply chain management are reported to include those of: (1) Location, (2) Production (3) Inventory and (4) Transportation. (Geospatial World, 2014, p. 1)

III. Example

The link between the products, facilities, vehicles and routes in the supply chain involve ensuring that the products reach the right facilities via the vehicles and routes that result in the less in the way of costs. Therefore, if Product A needs to be shipped to facility one and Vehicle 1 is running route A that results in direct delivery of product A to facility one then the most cost effective method of shipping the product has been chosen. In contrast, if Product A, needing to be shipped to Facility one is placed aboard Vehicle 2 which is running Route B. that delivers to facility two then the product will have to be shipped out again to reach facility one, resulting in higher direct costs in shipping and delivery. Technological solutions such as Geographic Information Systems assist the company in making the most out of the routes that its products travel with vehicles shipping those products and enable the organization to ensure that shipping is optimized making delivery of products faster and less costly. This conceptualization is shown in the following illustration labeled Figure 1.