Interaction of freight modes : automotive : electronics : fashion retail industries (in automotive industry perspective)

Abstract

In recent years, global sourcing has become norm in every facet of business. In automotive industry, global manufacturers are consistently streamlining their business process by outsourcing their non-core activities to low cost countries in Asia. Different parts of car are manufactured in various locations and assembled to achieve cost efficiencies. With the lengthening and more complex supply chain, multimodal capability plays a critical role in the strategic logistics network design. A good coordination of different transportation modes can achieve just-in-time (JIT) without delaying scheduled auto parts and components delivery.

Transportation, inventory and facilities are the three major forces in driving supply chain performance. Manage the trade-offs of transportation associated with other supply chain drivers – inventory and facilities are particularly important in keeping a low total logistics cost. The report focuses on the interactions of freight modes based on their individual mode characteristics. Furthermore, it identifies the top three factors affecting shippers’ choice of transportation modes by looking at auto parts’ product characteristics.

With this framework, case studies and interviews with industry professionals are carried out in collecting qualitative data of industry viewpoints and current strategies used. Based on the study of the automotive industry, we highlight the possible challenges faced by market players and logistics service providers. Finally, lists of solutions are provided for future improvement.