Transport industry employs 9.6 million people and there are 450,000 companies in United States. In fact the chain of transport is an essential source for expanding domestic and global business. It also interconnects companies, customers and partnerships through the medium of service of goods transporting from one place to another. There are huge successful multinational brands who have earned professional excellence in transport industry viz., Blue dart, FedEx, DHL worldwide express and many more. This paper details the essentials of logistics and management system in transport industry.
The definition of “Logistics” provided by Council of Logistics Management (1991) is as follows. “part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer’s requirements”.
There are many important factors in transportation management in terms of packing the goods, labeling, shipping and the mode of transport viz., truck, air cargo or shipment. Airbus 380 jumbo jet carries a huge cargo attending to different destinations around the world which is a great successful task and responsibility without which global business is not made possible. Likewise, ship cargo which carry oil and diesel, fish and other animal products requires excessive care in preserving the shipment from hazards and explosions.
Apart from the above, there are numerous goods that are loaded into transport industry such as electronics, motorcycles, textiles, FMCG, paper mail and even precious metals viz., gold, platinum, diamonds, pearls etc., Therefore transport industry enables meet the demands of companies and customers whereas customers require goods and services and companies require business volume and turnover. This has been made possible by transport industry which is why management system and functioning of transport industry is important with the fact that the role played by transport industry is vast and intermediary.
From the point of production / manufacturing unit, finished goods are arranged in transport for enabling dispatches to customers at different destinations. Logistics services are available throughout the world by air services, shipping services and truck services. In the global context of business B2B and B2C requires the collaboration of companies and transport systems for quick and prompt delivery of goods.
For instance, Oracle Transport Management clearly works towards gaining customers loyalty, reducing costs of transport, maintains supply chain through a single working system which integrates all geographical areas of operations, taps new markets through the use of technology to manage logistics world wide and works for greater margins of profit while reducing costs on operating expenses. There are many other software solutions apart from Oracle which have developed TMS as a one-stop-shop for meeting all requirements of TMS. ARC advisory group which was incorporated in 1986 has emerged as a leader in providing solutions for logistics and supply chain which is an important element for transport business companies. ARCs esteemed clients include Boeing, Microsoft, General Motors, Siemens and many other reputed companies.
Logistics and supply chain management is all about materials, finished goods and products. Materials are covered under materials management, distribution of finished goods to the customer whereas supply chain management and logistics are inter-linked as a network of communication with clients and customers. Logistics is a process of transporting goods, materials from the point of production to the end of production, distribution of goods, sale and waste disposal to meet the satisfaction of customers and increase business turnover. Some of the important services of logistics include, transportation, storage of goods, supply chain, appointment of contractors and calculation of freight. There are several functioning areas of logistics which are essentially consists of production, storage, whole sale chain, retail chain, warehousing, production units, manufacturing units and merchant distribution.
For the purpose of general understanding logistics can be explained as, at the time of production, materials have to be moved to the manufacturing units, and at this point inventory management and materials management has to be taken care of as a part of logistic system. After the production is completed goods are stored in warehouses, where again inventory management has to be taken care of for the purpose of keeping total cost of production and value of goods stored in warehouse. When finished goods have to be moved or sold to wholesalers, retailers this is considered as merchandising and distribution of goods is taken care of by transport management system. T
herefore logistics include several other services including human resources, operating cost and expenses. Many companies world wide, spend and allocate budget for transport expenditure as products are delivered to customers by means of transport. Therefore this process of TMS and logistics is a recycling process that works on routine and minimized operating costs such as fuel, diesel, maintenance expenses will add to the profits of company.
Both for global and domestic management of business TMS and logistics have to be applied and practiced for best results in business. Poor quality service may hamper business and many clients never rely on late deliveries, damaged goods in transport or causing accidents while carrying goods from one place to another. There are excellent software solutions available to carry on TMS and to transact global business of transport.
Whether it is tourism or e-business, e-commerce TMS plays a significant role in global business. Time being an essential factor in global business, goods have to be shipped or transported with optimum care and monitoring. There are success stories in many parts of the world such as Europe, Asia and U.S, in fact, with the advantage of e-business, several new logistics companies were commenced and have been expanding business due to the increasing demand for transport management systems. Although logistics began in 1950, until 1960s, it was confined to supplies to military and defense organizations. 21st century has attached a great importance to transport management systems as nations became inter dependent for global trading.
This business is worth billion dollars and requires huge trained manpower and skill both in terms of labor and in technical knowledge. With the advent of e-commerce and Internet security, on line booking of goods and shipping has become much easier process, which helps companies booking of orders at a fast pace as compared to the manual method of booking goods for transport.
Further this has also facilitated creation of many more jobs enabling employees to equip with the skills required for TMS and logistics management. Future prospects are bright for TMS due to the increasing demand for global business and this would further offer employment both on labor and skilled level of jobs.
Collaborations, partnerships and acquisitions are much common in these times for expansion of business and also to add capital strength to the companies. Therefore there is huge potential and scope for transport business whether operated at domestic level or at international level, at both ends, TMS has scope for making profits and in extending services of good and products.
Figure 1. Working of TMS
Figure 2 Cost cutting
No company is small or big until it records growth and indicates business turnover. Especially transport business is a 365 day business as there is movement of goods almost everyday either by means of truck or railway for domestic areas and air and ship for international business.
Therefore, professionally maintained organizations which deliver quality service would invite more customers and business organizations for extending services. Timely delivery and quality service is what is most required by the organizations without giving any excuses or reasons. Only in case of exceptional instances such as natural calamities, delivery of goods can be delayed and otherwise, goods have to be delivered on time meeting the satisfaction of client.
Beginning from super mar to the transport of people, TMS plays a vital role in delivering goods by the chosen means of transport by companies. The assistance of logistics in TMS means planning of goods packing, loading, transporting, unloading to the destination point, all these are included in planning of TMS which will enable companies to ship goods and services from one place to another by safe means of transport without causing any theft, damage or pilferage.
The companies which rely on TMS keep a bona fide and conduct for the services extended to its clients. There are many transport companies which have built reputation of good will by extending quality services to its clients. Logistics enable to companies to strategical planning in cutting transport costs, increasing asset turnover, costs for maintenance of inventory, improving CRM, and reducing fines and penalties that arise with custom authorities or such other transport personnel in rural and urban areas and in maintenance of excellent customer relation with companies.
Further logistics management lays out a clear picture of transport business, its strengths, weaknesses and threats and how to encounter such problems and conflicts that arise in the course of business. At every step of logistics management beginning from production unit, the execution of logistical planning begins viz., route planning, transport management, parcel shipping and delivery. This planning is applied both in domestic and international transport logistics.
Transport Asset Management is also a major factor, in adding trucks, cargo planes and ships to the respective companies in order undertake a big volume of business for larger turnover. Insurance, warranty, budget for asset procurement, cost per mile and preventive and cautionary measures for any unforeseen risks that may be encountered at the time of loading of goods.
Via the medium of TMS, there are several advantages for global customer for purchase of goods. For instance on line purchase of precious metals such as gold, jewellery and pearls facilitates safe and secured delivery of items ensured by the seller. Further purchase of computers, mobiles, DVDs, Cameras, clothes, shoes and even groceries have become much easier and these goods are being door delivered. Therefore, the customer is being offered with lots of benefits of choosing specific model and design. Whereas extra care and attention must be paid while providing credit card numbers and bank accounts for making on line payments to companies.
TMS performs a remarkable job for delivering mail services around the world through DHL and blue dart courier service. The massive success of blue dart for courier services is another example for quality and timely service executed with efficiency and trained and skilled personnel. In transport industry, excessive training is to be provided at every level of employment from the point of production till the point of packing and loading and unloading and even includes delivery of goods.
Much advantage can be drawn from available software solutions and net working technology to enable information flow from one place to another as transport industry moves and works with the flow of information at every level. Emails, telephones, mobiles are some of the best methods to communicate at a fast pace which prevents delays and enables quick and speed mode of work. Although the success rate of transport industry is very huge, unless an organization is equipped with proper management systems and qualified and knowledgeable staff, with trained and skilled labor, it is very difficult to carry on business either at domestic level and at international level.
The global challenges of transport management system are vast with extended responsibilities in terms of service and quality. Practice of TMS has been essentially yielding good results and achievements for companies. Apart from being a good management practice, TMS early signs of hazards, hassles that can be prevented in transport business. Every meticulous care and monitoring in TMS will add to the quality service whether it is in transport, air or shipping business.
Changing times evolve new concepts and new working systems in every sphere of business and these changes come with a proportionate success rate for businesses for adaptability and compatibility. These have to be worked with much vigor and research before any task for business is undertaken.
The Role of Transportation in Logistics Chain
Accessed 21 July 2007