Is your Transport Network value creating?

Posted by Barloworld Logistics on 22 Feb 2018 9:00:00 AM

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A transport network is the lifeblood of any supply chain. Without an adequate transport network, the entire system will malfunction, failing to deliver freight when and where needed. This seems relatively obvious, and indeed simple, but often such networks are products of history. Over time, organisations grow and evolve. Products lines are introduced or discontinued, markets are entered or exited, and demand is fluid. Organisations that have grown from humble beginnings to large complex operations can have deeply ingrained processes, some of which may well be defunct in the environment in which the organisation operates.

The challenge is that despite growth and evolution, a supply chain may be functioning to an acceptable level. However, a functioning supply chain, whilst sufficient is far from great in that it is simply an optimised version of an inefficient model. The first step in determining functional versus great is to gain oversight of the full supply chain network and then use computations to isolate legacy infrastructure. Such modelling allows for the creation of “what-if” solutions untethered to the constraints of “what is”.  Smart Transportation modelling and planning tests, amongst others, route efficiencies, optimal landed costs and transport mix and modes.

Ideal transportation networks encompass far more than the most direct road route between two points, going on to deliver real business benefits to those bold enough to critically question the status quo. Lower cost, better service and more efficient operations are enabled through the ability to test new modes and product flows. A smart transport network includes seemingly disparate factors such as inventory sourcing, production levels and service expectations to minimise landed costs throughout the network. By deeply understanding demand within the network opportunities for back-hauls, reduction of empty miles and inbound/outbound consolidation lead to, for example, reduction in transport miles and labour costs directly impacting the operating cost of the network. These factors further allow for the smart mitigation of carbon emissions as well as management of downtimes for vehicle servicing.

A modern transportation network is far more than tyres on the road, and through continuous review in partnership with experienced supply chain experts “what if” can become “what is” and real value can be unlocked.  

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