Can diversifying transportation modes prevent disruptions.

Can diversifying transportation modes prevent disruptions.

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This short article describes several techniques to reduce and steer clear of supply chain disruptions. Find more here.

In supply chain management, interruption inside a route of a given transportation mode can significantly impact the whole supply chain and, often times, even take it 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. For example, some businesses utilise a flexible logistics strategy that depends on multiple modes of transport. They encourage their logistic partners to diversify their mode of transportation to add all modes: vehicles, trains, motorcycles, bicycles, ships and also helicopters. Investing in multimodal transport techniques such as a mix of train, road and maritime transport and also considering different geographic entry points minimises the vulnerabilities and risks connected with depending on one mode.

Having a robust supply chain strategy will make companies more resilient to supply-chain disruptions. There are two forms of supply management problems: the very first is due to the supplier side, namely supplier selection, supplier relationship, supply preparation, transportation and logistics. The next one deals with demand management problems. 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? Based on a recent research, two methods are increasingly appearing to work when a interruption happens. The first one is known as a flexible supply base, and the second one is called economic supply incentives. Although a lot of on the market would argue that sourcing from a sole supplier cuts costs, it may cause dilemmas as demand fluctuates or in the case of an interruption. Thus, counting on numerous suppliers can offset the danger associated with sole sourcing. On the other hand, economic supply incentives work whenever buyer provides incentives to cause more suppliers to enter the marketplace. The buyer could have more freedom this way by shifting production among companies, specially in markets where there is a small amount of manufacturers.

In order to avoid incurring costs, various companies start thinking about alternate roads. For example, due to long delays at major international ports in a few African countries, some companies urge shippers to develop new channels as well as old-fashioned routes. This strategy detects and utilises other lesser-used ports. Rather than counting on an individual major port, as soon as the shipping company notice hefty traffic, they redirect items to more effective ports over the coastline then transport them inland via rail or road. In accordance with maritime experts, this tactic has many benefits not only in alleviating stress on overrun hubs, but additionally in the economic development of emerging regions. Company leaders like AD Ports Group CEO would probably trust this view.