Global Supply Chain Management

Global Supply Chain Management


Chapter 2/3

What are the Key Characteristics of the Five Principal Modes of Transport?

In terms of customer delivery, there exist five modes of transportation. They are rail, road, maritime, air and pipeline. However, not all the modes are options for logistics. Each offers advantages and disadvantages in regard to key transportation characteristics. One of the characteristics is product option, meaning that each transportation mode has a set of products which can be transferred from one place to another using this mode. For example, a limited number of products can be transported via pipelines. However, other modes of transportation such as rail and road have unlimited products for transportation. The second characteristic is the speed of delivery. It refers to a period of time needed to transport the product. Thirdly, accessibility is a characteristic that refers to whether a given method can allow delivery to a location convenient for a customer or another approach is required. Fourthly, cost is a characteristic used for evaluation of the charge of shipments. For example, cost may be measured in the following way: ton-per-mile. To facilitate the evaluation, SCM establishes the capacity of a shipment. It is a characteristic that establishes the amount of a product that can be transported (Mangan, Lalwani & Butcher, 2008).

What do we say that Transport is Derived Demand?

Demand for transport is derived because the purpose is not movement, but destination. The economic argument is that an event which takes place in one sector also impacts other sectors. As a result, demand derives from other economic activities. For example, a consumer buying good in a store triggers the replacement of this product; hence it generates demand for various activities such as resource extraction, manufacturing and transportation. What is different about transportation is that it cannot exist without demand. For example, un-purchased products can exist in a store, but unsold seat in a plane, for example, cannot accrue. As a result, there are two types of derived transport demand: direct and indirect. Direct derived demand refers to movements that are directly the outcome of an economic activity. However, indirect derived demand is referred to movements created by the requirements of other movements. Finally, transportation is derived demand because it can be latent. For example, it may represent a demand response to a reduction in the price of a commodity (Mangan, Lalwani & Butcher, 2008).

Identify example of companies/products with attempt to think global and act local (glocalisation)

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Glocalisation describes a product or service that is developed and distributed globally, but is also fashioned to accommodate users in a local market. As a result, multinational companies have to tailor their products to meet local laws, consumer preference and customs. Among such companies are McDonalds, Starbucks, Ford and Unilever. McDonalds base its product development on local preferences. For example, it introduced such menu items as Teriyaki McBurger in Japan. Starbucks uses locally designed franchises. For example, the local stores are non-Starbucks branded in order to attract customers. Ford was the first automotive corporations to globalize. Its growth strategy requires customer purchases done in regional centers; hence glocalising. Unilever adapt products to the local market marginally. It fine-tunes primary products instead of expensive total adaptation. For example, it identifies the need for regional products, and adapts its products to correspond to such needs. One of examples, is the success of walls ice cream in Asia (Rugraff & Hansen, 2011).

Taking your Own Country (Turkey) as an Example, Identify Freight Routes where you Believe Directional Imbalances Exist

Turkey lies on major air and surface trade routes between Asia and Europe. The oil sector is a major employer. The air transport exists to facilitate movements in places not served by surface transportation. Railways are few; however, road transport is large and competes with air transport. Business travel predominates, even though components such as foreign workers, travel for education and religious reasons are common. The demand for air transportation is inadequate, especially for exports, except Israel, creating an imbalance in the direction. The imbalance influences airline operations. An example of the route is transitional services offered by local ports from Asia to Europe. The imbalance results in the establishment of balanced capacity in bilateral air services such as open skies. Subsequently, modernization of airports to accommodate large airplanes increased the distance flown per passengers from various regions (International Transport Forum, & Organisation for Economic Co-operation and Development, 2009).

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