Transportation: The forgotten factor

By Francis J. Quinn -- Logistics Management, 9/1/2000

As editor of Supply Chain Management Review, I have the opportunity to review many books and white papers on supply chain management. The job also brings me to dozens of conferences and industry meetings with supply chain-related themes.

The talk at these events and in these articles covers a wide spectrum-how to design a supply chain, how to synchronize supply with demand, how to form alliances with your suppliers, how to select the right technology. And, of course, the hottest topic of all: How to understand-and then leverage-the power of the Internet.

Now, all of these issues are important and rightly deserve a prominent position on conference agendas and in the books and periodicals. The problem, however, is that in most of the discussions about effective supply chain management, one element is conspicuously missing, or at least underrepresented. And that is transportation.

The move to the e-economy has brought about many changes in the way we move goods and information through the supply chain. But one reality has not changed. The customer's most direct-and often most lasting-impression of you is based on how your product is physically delivered to its place of business.

The quality of the product's packaging and its condition upon arrival are crucial, though often overlooked, factors in the overall business transaction. The timeliness of delivery is absolutely essential, too, because more and more companies are operating on strict delivery schedules. How fast claims are processed or shipment problems are resolved are central parts of the total supply chain experience. So are the attitude, appearance, and professionalism of the driver who delivers the freight. (And no, it's not too much of a stretch to assert that the driver helps create the customer's overall impression of you and your product-whether we're talking about your private fleet or a for-hire carrier.)

Logistics managers need to keep these considerations in mind as they investigate the various electronic exchanges and dot-com marketplaces that are proliferating today. Certainly, these technologies have a place in the new economy-and anyone who would foreclose on using them probably does a disservice to his or her company.

Yet transportation remains the final and most direct link to the customer. For this reason, transportation management and carrier selection cannot be an afterthought or a secondary responsibility assigned to someone with no real experience. And the idea of going out blindly into the electronic market and making transportation decisions based on price alone is an invitation to disaster.

Companies expend tremendous amounts of time and resources determining the right configuration for their distribution network or evaluating the right supply chain technology. The same type of rigorous analysis should be applied to the evaluation and selection of transportation options for actually moving the freight to the customer. This is the last link in a supply chain that stretches all the way back to the sourcing of the raw material. If there's a problem at this critical juncture, then all of the excellent planning and executing that went before could go for naught.

Francis J. Quinn is editor of Supply Chain Management Review, published by Cahners Business Information. Visit the magazine s Web site at www.supplychainlink.com.