Multimodal transport methods in supply chain management can offset risks associated with counting on an individual mode.
To avoid incurring costs, different companies give consideration to alternative roads. As an example, because of long delays at major international ports in certain African countries, some companies recommend to shippers to develop new routes as well as conventional channels. This tactic identifies and utilises other lesser-used ports. In the place of counting on a single major commercial port, as soon as the delivery company notice hefty traffic, they redirect goods to more effective ports across the coastline and then transport them inland via rail or road. According to maritime experts, this tactic has its own benefits not merely in alleviating stress on overwhelmed hubs, but in addition in the economic growth of emerging markets. Business leaders like AD Ports Group CEO would likely trust this view.
Having a robust supply chain strategy could make companies more resilient to supply-chain disruptions. There are two main kinds of supply management problems: the first has to do with the supplier side, particularly supplier selection, supplier relationship, supply preparation, transport and logistics. The next one deals with demand management issues. These are dilemmas related to product introduction, manufacturer product line management, demand planning, item rates and promotion planning. So, what typical methods can firms use to enhance their capacity to sustain their operations when a major disruption hits? In accordance with a recent study, two techniques are increasingly showing to work each time a disruption happens. The first one is called a flexible supply base, while the second one is named economic supply incentives. Although some in the industry would argue that sourcing from a single supplier cuts costs, it can cause issues as demand fluctuates or when it comes to an interruption. Hence, depending on numerous manufacturers can decrease the risk associated with sole sourcing. On the other hand, economic supply incentives work when the buyer provides incentives to induce more vendors to enter the marketplace. The buyer will have more flexibility this way by shifting production among suppliers, especially in areas where there exists a small amount of companies.
In supply chain management, interruption inside a route of a given transportation mode can considerably impact the whole supply chain and, at times, even take it up to a halt. As such, business leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility in the mode of transport they depend on in a proactive manner. As an example, some businesses utilise a flexible logistics strategy that depends on multiple modes of transport. They urge their logistic partners to diversify their mode of transport to incorporate all modes: trucks, trains, motorcycles, bicycles, vessels and also helicopters. Investing in multimodal transportation methods such as a mix of rail, road and maritime transportation and also considering different geographic entry points minimises the weaknesses and risks connected with counting on one mode.