Transportation Management Metrics and the Supply Chain
Supply chains or logistics networks are complicated arrangements that need to be managed accurately and efficiently with the appropriate transportation management metrics.
Managing a supply chain or a logistics network can often seem like a daunting task, especially given the fact that these systems are generally quite complex and involve coordinating many different parts. Indeed, the path from the originating suppliers and manufacturers to the end distributors and consumers is usually a long and complicated one where any of a large number of things can go wrong. Transportation management metrics can serve as valuable indicators to ensure that managers are getting an accurate, up to date picture of the performance of the various parts of the process.
These systems arise naturally out of the collaboration of various organizations with their various specialties, products, and services. A large network may be composed of many smaller businesses that take care of their specific areas of responsibility, from manufacturing to sales. In this case, it is a little bit harder to manage across all stages of the chain, since these stages belong to different organizations. Inter-business committees and groups should be formed and encouraged to foster more efficient cooperation across the board.
This is not always the case, of course, and sometimes the entire network will lie in the hands of just a few companies, or even just one company. This represents a tradeoff, since the wider scope would require much greater investments as well as maintenance, but would also result in the organization having much greater control. No longer will it have to rely on third parties for the other equally vital parts of its logistics network. Typically, this is only true for very large or very small businesses, as the economics of scale come into play. Very small organizations have very simple logistics networks that are easily handled. Very large organizations, on the other hand, while having much more complex networks, also possess enough resources and manpower to manage these networks by themselves.
But no matter what the scale of the supply chain is, it cannot be denied that paying attention to the relevant metrics is crucial to continued success and efficiency. There are a lot of metrics, as should be expected from such complex systems, but they can generally be broken down into a number of types. These types are quality metrics, asset management, process management, financial, and warehouse utilization. Ideally, at least some metrics from each set should be included in the list of metrics that management keeps track of, in order to ensure that all aspects of transportation are accounted for.
However, in practice, it may also prove useful to focus on the aspect that needs the most help at the moment. Of course if the supply chain is working smoothly, then keeping track of metrics across all stages should not be a problem. But in real situations where problems arise and less than ideal circumstances force less than ideal decisions, there is always room for improvement. By focusing on the transportation management metrics applicable to the one or two aspects that are adversely affecting overall performance, it should become possible to identify causes and generate solutions.
Tags: management metrics, supply chain, transporation metrics
