Transportation in a Supply Chain - Design options for a transportation network

8 important questions on Transportation in a Supply Chain - Design options for a transportation network

Which three questions do you need to account for when designing a transportation network?

  • Should transport be direct or through an intermediate site
  • Should the intermediate site stock product or only serve as a cross-docking location
  • Should each delivery route supply a single destination or multiple destinations

What is a milk run?

a route on which a truck eiter delivers products from one supplier to multiple retailers or goes from multiple suppliers to one buyer

What is a direct shipment network to a single destination?

with the direct shipment network to a single destination option, the buyer structures the transportation network so that all shipments come directly from each supplier to each buyer location. Each shipment route is specified.
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What is a direct shipping with Milk Runs network?

In direct shipping wiht Milk Runs, a supplier delivers directly to mulitiple buyer locations in the same truck route.

What is an All shipments via Intermediate Distribution Center with Storage network?

product is shipped from suppliers to a central distribution center, where it is stored till needed by buyers and shipped independently to each buyer location. Mostly used when large economies of scale on the inbound side or the outbound side cannot be controlled.

What is an All Shipments via Intermediate Transit Point with Cross-Docking network?

Suppliers send their shipments to an intermediate transit point, where they are cross-docked and sent to buyer locations without storing them. Little inventory, product flow is fast.

What is a Shipping via DC Using Milk Runs network?

Can be used when lot sizes to each buyer location are small. Milk Runs reduce outbound transportation costs by consolidating small shipments.

What is a Tailored Network?

a suitable combination of other supply chain networks that reduces cost and improves the responsiveness of the supply chain.

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