With the recent report of rail facing a meltdown, supply chain professionals have to look into the systems and processes to bring the needed materials into their shop floor and eventually to the end-customer.
A properly design system has the ability to take these types of problems in stride. A properly designed system would be able to take additional time into consideration and factor this into the logistics process.
Rail happens to be a very effective way to move large quantities of items from one coast to another. Unless the quantity is large, or the weight is excessive, moving things a short distance via rail is not effective from a time or cost perspective. Having said that, intermodal solutions have been effective solutions and rail intermodal solutions have saved dollars for items which are not time sensitive.
Trucking items is fast but with the price of gas and the shortage of equipment, costs are rising. Trucks also have a weight and time limitation imposed by state and federal mandates.
Air freight is very fast but weight is a large factor here as it increases the cost.
Ships are very effective as long as the port to port makes sense. However, going cross continent can be very costly.
So what is needed by most companies is an effective TMS system which can analyze the cost differences and pick the best routing. By choosing the correct routing, this allows the supply chain to adjust to changes in the cost, timing and reliability of each of the different modes of transportation.
Many consultants are trying to improve their clients supply chain by beating up on transportation vendors, but this should not be the target. Carriers are in the driver seat right now, and customers of these services need to make sure that they are choosing the best, most efficient loads before committing to equipment.
Managing your loads with a manual system or with a TMS system which is ineffective will cause you to plan loads which are ineffective. These ineffective loads are not only going to impact your margins, but impact your reputation.
As always, with all these things, there are opportunities to improve your costs, improve your revenue and meet your customer’s delivery expectations.