Supply Chain Performance and Logistics

¶ … supply chains continue to gain in importance as a core attribute of current and future business models across nearly every industry, the need for using IT resources more effectively in orchestrating each transportation mode becomes essential. Orchestrating supply chain processes from transaction to fulfillment provides third party logistics providers (3PLs) with the opportunity to manage and modify manual processes to gain greater performance on a consistent basis (Gilmore, 2002).

In the article Global logistics solutions: A Guide to the problems Shippers face (MacDonald, 2007) the author provides an overview of how supply chains need to be managed as a strategic series of process and system assets, with specific attention paid to the orchestration of transportation modes.

Four critical problems supply chains face are also discussed including a lack of supply chain visibility and forecasting, the need for continual quality improvement at the process level, more optimization of transportation network designs, and selecting the best possible analytics and metrics to measure global performance. These four problems taken together are often the impetus for many corporations who have a high reliance on their supply chain systems to create and expand a technology platform to support and strengthen suppliers, buyers and their supplier network (Milmo, 2002).

Managing and optimizing a transportation network design concentrate on the most relevant analytics and metrics given each mode of transportation being used in order to gain the most efficient and profitable result (MacDonald, 2007). The following analysis evaluates effective vs. ineffective transportation designs and the modes of transport they are based on, exploring the implications of these on global supply chains.

Assessing Effective and Ineffective Transportation Design The most ineffective of transportation designs are those built on the assumption that there will be little of any significant change to the underlying market conditions and factors driving a business. With so many supply chains predicated on this assumption, it is not surprising that the greatest challenge many face is visibility and forecasting (MacDonald, 2007). Supply chain visibility across the many modes of transportation is essential for any manufacturing company to meet the customer delivery dates they have set (Gilmore, 2002).

Creating greater visibility across road, rail, maritime, air, intermodal and telecommunications-based supply chain components all needs to start with the design of transportation network designs that are agile enough to react to market pressures yet strong enough to withstand varying types of market conditions and transaction velocities (Trunick, 2002).

Each of the modes of transportation, from road and rail to pipelines, maritime, air, intermodal and telecommunications, all need to be galvanizing the explicit goal of how they can be optimized for the specific product, business and customer objectives they are designed to fulfill (MacDonald, 2007). The second most significant problem is managing the quality of the supply chain process itself, including its continual improvement and fine-tuning to a businesses' needs (MacDonald, 2007).

It has often been said that the greater the ownership and visibility within a supply chain the greater the accuracy and velocity of orders. The more a given company can "own" the process of their supply chain through tight supply chain orchestration at the IT and process levels, the more effective they become at managing to quality metrics over just velocity and volume (Gilmore, 2002).

Concentrating on how to create an agile, flexible supply chain network that has the capacity to flex and change to market conditions while attaining the highest level of performance possible is what separates world-class companies from their counterparts who often struggle to attain market growth. This leads to the third major problem that companies face in growing their supply chains worldwide, which is how best to optimize their transportation networks design. This becomes especially challenging when there is a wide variety of transportation modes in use (MacDonald, 2007).

Optimizing a global supply chain for the constraints of each mode of transportation leads to greater agility and more focused approach to measuring performance, which is the fourth major problem companies face when building global supply chains. Using the right analytics and metrics of performance to measure worldwide supply chain performance is a daunting, very difficult process. Modes of transportation vary in terms.