Reconfiguration Of Supply Chains And Implications For Transport

7002 words - 28 pages

Keywords Supply chain management, Distribution systems, Distribution operations,Distribution management, Freight forwarding, Transport managementAbstractA large number of firms have reconfigured their supply chains. The general trendsentail, among others, the reduction, centralization and re-location of plants and distributioncenters, the design of new distribution systems, and the reduction of the supplier base. The analysis of the implications of such reconfiguration for freight transport has received comparatively little attention, and most of the analysis has focused on the development of different theoretical models showing how changes in logistic structures and decisions could affect the transport demand. Using empirical data from Denmark, this paper sheds some light on the implications of reconfiguration supply chains on transport. Industry mail surveys among Danish firms as well as an in-depth case study were performed. The consequences of the reconfiguration process on the present and future demand for transport are measured and analyzed in terms of the quantity of transport units used (trucks/containers), and the transport-work (ton/km).IntroductionA large number of international companies have reconfigured their supply chainsduring the last decade. The most prominent drivers behind this trend have been: globalcompetition, increased focus on market requirements, advances in information andcommunication technology (ICT), and development in international freight transportsystems.Global competition has forced the companies to relocate their plants anddistribution centers in order to be both competitive and cost-efficient. In someindustries, e.g. the automotive and electronic industries, the focal company requiresthat their key suppliers locate components production, sub-assembly plants orinventory close to the focal company's assembly plants. In other cases, firms aremoving their manufacturing operations to low-cost countries in order to be morecost-efficient. The German car industry has gradually moved to Poland, Hungary, theCzech Republic, and South Africa. Similarly, most of the shoe and fashion industrieshave moved their labor-intensive activities to the Far East.Market requirements also force firms to reconfigure their supply chains. Theincreased pressure on time-to-market and order-to-delivery requires firms to be in closeproximity to their customers, not necessarily in terms of physical distance, but in termsof time. 24-48 hour lead-time requirements in Europe are, for example, quite common inseveral industries. This situation often means that firms have to reconfigure theirdistribution centers' structure in order to meet these requirements. In the same vein,requirements for customized products and services have meant that firms havereorganized their production and distribution systems in order to be agile enough toproduce and deliver customized products and services. Postponement of productionand/or logistics (see, e.g. Pagh and...

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