Transportation excellence is the main factor, which helps many companies to save costs and deliver the best possible quality of services to their customers. Designing physical distribution systems to meet market needs is a dynamic problem, for continuous changes in markets, products, and processes bring about new physical distribution techniques and patterns. Competition and pressures to reduce costs are also stimuli. The article by Dan Gilmore vividly portrays the main components of transpiration excellence and their importance for the supply chain.
The main success factors are process improvements, shipment optimization, reduction of transportation costs, and improved quality. Demand characteristics are directly related to physical distribution systems. Where demand is widely variable, then distribution facilities are usually concentrated in fewer locales. Where demand is continuous and rather consistent, as is the case for some food products, distribution facilities can be decentralized. A highly variable demand makes it difficult to design effective physical distribution systems and control costs, while a stable demand permits it (Gilmore, 2002). In between these extremes, where demand patterns can be discerned through analysis, as with seasonal products, reasonable distributions systems may be approximated. High-value items, if heavily stocked, mean a heavy inventory investment and hence increased costs. Their storage is often minimized. For them, transportation is a modest amount of the total price. Physical distribution systems are geared to the optimization of the system as a whole rather than any part of it (Christopher, 2005).
Process improvement is crucial for transportation excellence as it allows companies to reduce the number of employees and improve service quality. Effective allocation can only be achieved, however, through planned behavior. Although finance and production have long been planned, marketing activity has not. Often it has been performed rather haphazardly. The emphasis on planning of marketing operations (which is new, and has been stimulated by the marketing management concept) is now widely applied (Gilmore, 2002).
Process improvement is concerned with predetermining courses of marketing action. It is based on both marketing intelligence and the assessment of opportunities since it deals with the future with respect to both perspectives and operations. Marketing programming and marketing activities are its major objectives, which are achieved through organizational implementation (Crammer & Wegfahrt, 2006). Two general approaches to marketing planning exist a deterministic or general formula approach, and a dynamic approach. The former, a rather static approach, usually details the marketing planning procedure as follows: (1) determine objectives or goals; (2) set up a plan to achieve them; and (3) control the elements to make sure they conform to the plan. The sequence is goals, plans, and control. This approach ignores the realities of marketing situations. The dynamic approach stresses that retailers should plan for change. It underscores the fact that plans are not merely the results of objectives, but that plans affect objectives. The goals and objectives can be changed, as can the plans. Changes in market opportunities, for example, result in changes in company objectives and hence changes in marketing planning. In addition, a company might purposely set out to change its marketing plans in the sense of improving them (Christopher, 2005).
For modern companies, planned activity is goal-directed and achieves a more efficient expenditure of marketing resources. Process improvement necessitates the classification of a company’s goal or objective, but recently there has been a change in the perception of planning. A company first specifies goals and then develops plans to carry them out, thus being able to achieve the goals. Goals thereby determine plans -plans are ways of reaching goals. Another dimension of the relationship between goals and plans stems from the fact that an organization does not have a single corporate goal; it has multiple goals. Thus, a decision that at first appears to be a compromise among conflicting goals actually creates a major goal. This goal is the weighted average of all corporate goals rather than a single goal. As the basic vehicle for matching ends with means or marketing resources with market opportunity, marketing planning becomes the mechanism through which a company is brought into line with the external environment. Planning is an essential function of transportation management, which has a forward-looking, integrated, and balanced view of total action. Transportation planning encompasses the perspective of the future, the types of objectives established, and the strategies and tactics to be employed. Through transportation planning, the fundamental strategies of the business enterprise are conceived based on market needs, forces, and opportunities; and marketing is implemented as a philosophy of business operation and a way of corporate life (Murphy & Wood 2005).
It is evident that the process improvement involves (1) corporate values and objectives; (2) the appropriate personnel; (3) personal values and objectives; (4) marketing opportunities; (5) marketing barriers; (6) the business organization and its resources; and (7) the time horizon and space dimension. All of these factors must be combined in an integrated network of activities. In each company subsystem, concessions must be made to achieve a unified plan. Temporal and spatial relations are particularly important (Gilmore, 2002). The major goal of transportation programming is programming the marketing mix. It balances transportation resources and transportation inputs in terms of the communication mix, distribution mix, and product and service mix previously described. Transportation programming is, then, a process of devising or arranging the correct order in which various mixes should be initiated and completed, based on flexible application, evaluation, and revision. (Murphy & Wood 2005).
As one of the most significant managerial functions, process planning is a prime responsibility of the top marketing executive. The very nature of critical day-to-day operations, the pressures of time, and the tendency to act rather than plan, frequently cause executives to neglect this function. Process planning provides retailers with a forward-looking view of the total enterprise. It is the basis for determining the fundamental strategies to be employed and the objectives, programs, and resources required. Process improvement is to a business enterprise what thinking is to an individual. It supplies the rational means for achieving maximum market-striking power and results from the resources in hand. Transportation planning is closely related to problem-solving. Transportation planning constitutes an intentional, unified approach to the solution of various transportation problems. Although the specification of a plan for solving a problem is the first step, execution must accompany planning to achieve results. Planning is neither automatic nor impersonal (Gilmore, 2002).
In sum, process improvement in transportation is a rational way of translating experience and thought into marketing action. It is a pragmatic, organized procedure for analyzing situations and meeting the future. Based on information about ends and means to determine various causal relationships, trends, and patterns of behavior, it is concerned with the selection of alternative strategies.
References
Christopher, M. (2005). Logistics & Supply Chain Management: creating value-adding networks. FT Press; 3 edition.
Crammer, L. J. & Wegfahrt, A. M., (2006). Ranked #9 Proximity to Major Markets. Area Development Site and Facility Planning; Easton, 41(5).
Gilmore, D. (2002). Achieving transportation excellence. World Trade, 15 (11), 26-28.
Murphy, P. R. Wood, D. (2005). Contemporary Logistics. Prentice-Hall; 9 edition.