Could diversifying transportation modes prevent disruptions.

Could diversifying transportation modes prevent disruptions.

Blog Article

Companies that diversify their logistics and use alternative routes overcome many supply chain problems.

In supply chain management, disruption within a route of a given transport mode can somewhat influence the whole supply chain and, in certain cases, even take it up to a halt. As such, business leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility into the mode of transport they depend on in a proactive manner. As an example, some businesses utilise a flexible logistics strategy that depends on numerous modes of transport. They urge their logistic partners to diversify their mode of transport to incorporate all modes: trucks, trains, motorcycles, bicycles, vessels as well as helicopters. Investing in multimodal transportation practices including a mixture of rail, road and maritime transportation as well as considering various geographic entry points minimises the vulnerabilities and dangers related to depending on one mode.

Having a robust supply chain strategy might make firms more resilient to supply-chain disruptions. There are two main kinds of supply management dilemmas: the very first has to do with the supplier side, particularly supplier selection, supplier relationship, supply planning, transport and logistics. The second one deals with demand management dilemmas. These are dilemmas regarding product introduction, manufacturer product line management, demand preparation, product prices and promotion preparation. Therefore, what common methods can companies adopt to improve their capacity to sustain their operations each time a major disruption hits? In accordance with a current research, two strategies are increasingly showing to be effective whenever a interruption happens. The initial one is known as a flexible supply base, and the second one is named economic supply incentives. Although many in the market would contend that sourcing from a single provider cuts expenses, it can cause issues as demand varies or in the case of a disruption. Hence, depending on multiple companies can mitigate the risk related to single sourcing. On the other hand, economic supply incentives work if the buyer provides incentives to cause more manufacturers to enter the market. The buyer will have more flexibility in this manner by moving manufacturing among vendors, particularly in areas where there exists a small amount of suppliers.

To avoid incurring costs, various companies start thinking about alternate routes. For example, due to long delays at major international ports in a few African countries, some companies urge shippers to develop new channels in addition to conventional tracks. This tactic detects and utilises other lesser-used ports. In the place of depending on just one major commercial port, when the delivery business notice hefty traffic, they redirect products to better ports across the coast and then transport them inland via rail or road. According to maritime experts, this plan has its own advantages not just in alleviating pressure on overwhelmed hubs, but in addition in the financial growth of growing areas. Business leaders like AD Ports Group CEO would likely agree with this view.