Multimodal transport methods in supply chain management can offset risks associated with counting on an individual mode.
To avoid taking on costs, different companies think about alternate paths. As an example, because of long delays at major international ports in certain African countries, some businesses urge shippers to build up new channels in addition to old-fashioned tracks. This strategy detects and utilises other lesser-used ports. Rather than depending on an individual major commercial port, as soon as the delivery company notice hefty traffic, they redirect items to better ports over the coast then transport them inland via rail or road. According to maritime experts, this strategy has its own benefits not just in relieving pressure on overrun hubs, but in addition in the economic growth of emerging economies. Company leaders like AD Ports Group CEO would probably agree with this view.
In supply chain management, interruption in just a route of a given transportation mode can somewhat impact the entire supply chain and, often times, even bring it to a halt. As a result, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility in the mode of transportation they depend on in a proactive way. As an example, some companies utilise a flexible logistics strategy that depends on numerous modes of transport. They encourage their logistic partners to mix up their mode of transportation to include all modes: trucks, trains, motorcycles, bicycles, ships as well as helicopters. Investing in multimodal transport practices such as a combination of rail, road and maritime transportation and even considering different geographical entry points minimises the vulnerabilities and risks related to depending on one mode.
Having a robust supply chain strategy might make companies more resilient to supply-chain disruptions. There are two main types of supply management dilemmas: the very first is due to the supplier side, particularly supplier selection, supplier relationship, supply preparation, transport and logistics. The next one deals with demand management problems. These are problems regarding product introduction, product line management, demand planning, product pricing and advertising preparation. Therefore, what typical techniques can companies use to improve their capability to maintain their operations each time a major interruption hits? Based on a current study, two strategies are increasingly proving to work each time a disruption happens. The first one is known as a flexible supply base, and the second one is called economic supply incentives. Although some on the market would contend that sourcing from a sole provider cuts costs, it can cause dilemmas as demand varies or in the case of a disruption. Hence, counting on multiple suppliers can alleviate the danger related to sole sourcing. Having said that, economic supply incentives work if the buyer provides incentives to induce more manufacturers to enter the marketplace. The buyer will have more freedom in this way by shifting manufacturing among vendors, specially in areas where there is a small number of manufacturers.