It is a long term plan for setting out an organisation‘s transport objectives, policies and proposals that help it achieve its transport priorities and vision.
Transport management strategy helps an organisation to:
- Develop a holistic independent approach to transportation management
- Gain visibility in your global supply chain
- Use your system to drive integration partners
- Leverage your human resources
- Consider financial implication of transport network
For transportation strategy to be successful should recognize the following:
- Customer requirements. The supply chain involves continuous and efficient movement of product from vendor to manufacturer to customer. Thus the transportation program must reflect and meet the customer‘s needs. The vital aspects are time and service.
- Timely movement of shipments. Customers demand their shipments be delivered as they require – on the date needed, by the carrier preferred, both shipped complete and delivered complete and in good order. A transportation program, which can do this, can provide customer satisfaction and give a competitive edge.
- Mode selection. Selecting the mode of transport is an important consideration. The transit time has to be considered while doing so.
- Carrier relationships. Volume catches the attention of the carrier of forwarder. The carrier attention with volume creates a competitive interest in a business. Another side to this attention is that the business cannot be divided among many carriers. The chief reason being that responsive transportation can create a competitive advantage and this can be done only with a focused relationship with a carrier.
- Measuring/benchmarking. There is a necessity to know about the performance of the strategy as well as the carriers. Measuring and benchmarking can be of assistance to this. Measuring means comparing performance versus standards. Benchmarking means learning what other companies do–the best practices. Benchmark needs to be done with a company in the same industry.
- Flexibility. As change is happening everywhere, the strategy has to be ready to change. There is a constant change in the customers, products, business, suppliers and the overall corporate emphasis, which can dramatically change the company‘s strategy. It is important to recognize that change will occur. Just as times are changing, the strategies will also keep changing. A company must adapt itself to such an environment.
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