SUPPLY CHAIN

The Global Supply Chains

The Global Supply Chains

Introduction

In last ten years, an immense importance is given to the concept of “supply chain management”. Companies are looking for most effective ways of managing the inflows and outflows of materials from one place to another. Globalization helps organization to save time and have quality materials from one country to another. Building close relations with suppliers is a key for effective supply chain management (Zacharia et al., 2001, pp.2).

The program of supply chain management involves the operations of manufacturing, buying, transporting, and physical distribution of resources in a cohesive form. It includes all the partners that lie in the chain of supplying. It also includes the supply chain within the organizations (Zigiaris, 2000, p.22).

The definition of supply chain management has extent because of the element of global supply chain design. Global supply chain includes the factors involve in globalization and facilities in international locations (Gargeya and Meixell, 2005, pp.2). Organizations use a number of modes in order to move goods, services and materials from one place to another. Organizations with global supply chain networks can use various methods transports for the transferring of goods and services from one country to another country. Selection of the method of transport depends on the requirements of the organization. It is either to save cost or to increase the quality of the final product offered to customers. There are companies who aim to achieve quality along with cutting the cost by using global supply chain network.

Discussion

The operations of transportation are the determent that shows the efficiency of moving products from one place to another. The techniques and strategies of management help organization to improve the transferring of stuff, speed of the delivery, service related qualities, cost of operation and to save energy. Transportation is an important part of logistic for all kinds of organizations. Transportation is a dynamic element for effective supply chain as it assists to joins all the separated activities. Performance of transportation has a gigantic impact on logistic system as it around occupies 33% of the total logistic cost. It has a significant impact on the production, manufacturing and delivery to the customers (Tseng and Yue, 2005, pp.1).

Although transportation is one of the most important element of logistic, but it doesn't mean that logistic reflects the outcome of transportation only. Effective logistic include getting the right good, on the right time and on the right place with reasonable cost (Wilmott, 2011, pp.202). The five primary modes of transportation include road, pipelines, air, sea and railways.

There are two fundamental principles that impact transportation efficiency.

Economy of scale: Economies of scale in transportation is the rate per unit of weight decreases as the volume of a batch increases. Transportation economy of scale occurs when the fixed cost associated with transportation a cargo over the increase heaviness and price of loading, receiving, invoicing.

Distance Economy: The distance economy refers to reduced transportation rate per unit of weight as distance raises. It is also known as the tapering ...