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Cost Of Transportation In Supply Chain Management

Supply chain management is such a daunting task that it requires all stakeholders to use their skills and networks to improve operations within the organization. As the vice president, I can posit that perseverance and patience are vital when maximizing global transportation. It is possible for every venture to receive huge savings while meeting customer needs. It does not matter the size of the organization. The most important aspect is an understanding of the best approaches that will scale operations within the premise. As the Vice President, there exist three recommendations that can make it possible to maximize efficiency and minimize the associated costs within the organization. This instance will always make it possible to achieve growth and limit pilferages that can result in the venture.

Ideally, the recommendations outlined below do not depend on the most sophisticated technologies and can apply to almost every organization in contemporary society. In the first instance, there is a need to know the total transportation cost. The approach makes it possible to know the scope of operation and limit any aspect of scope creep that might prove detrimental to the success of the whole venture. The instance should ask a number of questions. For instance, it is imperative to know all the methods used in tracking transportation costs (Hummels, 2007). Moreover, an understanding of the components passed on to the customers and the amount absorbed will indeed make planning possible and improve the effectiveness of the entire venture. The solution to these questions should happen on an ongoing basis since they play a crucial role in the acquisition process. Our organization found it imperative to use a transportation business intelligence system.

Ideally, some operations exist in that area. It is essential to scale such a system to meet the needs of the organization. Ultimately, it is apparent that the establishment of a corporate transportation mandate on matters related to awareness makes it possible to meet the needs of the whole system. That is the surest way to ensure success as well as growth while addressing critical aspects of the organization. Even though the system might prove useful, it is imperative to ensure that users get the necessary training to limit the aspect of resistance, which can also thwart key operations within the organization.

The best metric that the organization can utilize is the monthly recurring revenue. This instance makes it possible to evaluate costs and determine if the organization is making progress or not. The purpose of the organization was to make a profit. That should, however, happen and still ensure customer satisfaction (Bowersox, Closs & Cooper, 2002). An evaluation of the net profit margin makes it possible to determine progress as a result of the key processes outlined above. In every organization, it is key to evaluate the roles that every individual plays in fostering growth. Such makes it possible to benchmark with different firms to find out what works best for them in specific instances. It is likely that specific processes might not be well-suited to the demands of the market. The ability to identify these aspects earlier limits the possibility of failure within the organization. While all these needs might happen within the organization, it is necessary to embrace customer satisfaction and make it possible to scale every sector of the premise. Transportation can be an expensive venture in specific instances. It is imperative to ensure that all the processes implemented aim to cut costs and make it possible to meet the ultimate goals of the organization.


Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2002). Supply chain logistics management (Vol. 2). New York, NY: McGraw-Hill.

Hummels, D. (2007). Transportation costs and international trade in the second era of globalization. Journal of Economic Perspectives21(3), 131-154.



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