INDUSTRIAL ENGINEERING APPLICATIONS IN TRANSPORTATION:TRANSPORTATION AND THE SUPPLY CHAIN

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TRANSPORTATION AND THE SUPPLY CHAIN

Supply chain management is a comprehensive concept capturing objectives of functional integration and strategic deployment as a single managerial process. Figure 1 depicts the supply chain structure.

This structure has been in place for decades. Even when the manufacturing activity takes place in minutes, the final delivery of a product may take days, weeks, or months, depending on the efficiency of the supply chain. The operating objectives of a supply chain are to maximize response, minimize variance, minimize inventory, maximize consolidation, maintain high levels of quality, and provide life-cycle support.

Transportation is part of the physical distribution. The physical distribution components include transportation, warehousing, order processing, facility structure, and inventory. The major change in

Industrial Engineering Applications in Transportation-0000

the supply chain in the last decade is information. It is information that allows transportation planners to reduce the costs in the supply chain in today’s highly competitive environment. The integrated freight transportation systems that facilitate the movement of goods, information, and funds can target all areas of the supply chain. Every segment of the supply chain has a transportation need.

In an organization, transportation requirements may cover a wide range of territory and frequency characteristics. Decisions are usually made on the basis of cost as long as customer requirements are met. When making decisions that affect the organization’s supply chain, it is important not to look at transportation alone or as an independent activity. Instead, transportation should be viewed in the context of the entire supply chain in order to make the most effective decisions (Figure 2).

The remainder of this chapter examines industrial engineering applications in transportation. We concentrate our attention in the transportation of goods. However, the techniques reviewed in the following sections can be applied to a variety of transportation problems. We do not provide a complete survey; instead, we present several representative applications in some detail.

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