STUDENTS' CORNER - 173
Tailoring transportation allows a supply chain to achieve appropriate responsiveness and cost. Customer density, distance and product size decide the mode of tailored transportation
Depending on the product you have to transport and on the customer to whom you transport, you choose a transportation mode economically. Transport involves, you know, basically two very important facts: Distance of travel and the quantity of products transported. For a short local distance and a small number of quantity of products for a local customer, it is enough you choose transport by road, and you do not require any transport by water and by air. This is the process of tailored transport.
A tailor cuts the cloth to sew a shirt or any garment according to the measures specific. Need-based cutting the cloth to make a dress is actually tailoring. Cutting the cloth less than required makes the dress unsuitable and therefore waste of time, energy and material, all involving expenditure. Or cutting the cloth more than the specific measurements is also equally wasteful work since the dress will not be right size for the order and therefore the customer will not want it and much more important thing is the customer will be tempted to choose some another tailor. The tailor loses the customer. Same thing applies to transport.
Tailored transport refers to meeting the customer needs with a minimum cost. For a local customer who has ordered a small quantity, you need not go in for a big transport vehicle; the quantity of the products to be transported requires a small vehicle means going for a bigger vehicle is actually loss to the company because the customer won’t be willing to pay extra for your uneconomical mode of transport. In the same way, the route taken for transport must be the shortest so that the fuel cost and additional costs to meet the driver’s salary can be minimal. Suppose you engage two drivers to transport the product where one driver is enough, you are spending in excess to the need and the customer is not responsible.
Experts talk about low density, medium density, and high density for a distance which may be short, medium and long. They give you guidance for tailored transportation. The basic fact is simple. Where two rupees are sufficient to transport a product, spending three rupees is uneconomical leading to loss to the company. And reducing it to one rupee is creating chances of damage to the product which also ends in loss to the company. In short, tailored transportation is a business strategy to achieve a cost effective transport.
In our next session, we shall see about routing and scheduling in transportation.