Modes of Transportation and Sustaiable Transport related to supply chain

8/2/2019 Modes of Transportation and Sustaiable Transport related to supply chain

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Running head: SUPPLY CHAIN MANAGEMENT

Importance of Supply Chain Management for Global Organizations

[Name of the Writer]

[Name of the Institution]


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Table of Contents

Table of Contents ........................................................................................................ ii

Introduction .......................................................................................................... 3

Modal Options ....................................................................................................... 3

Sea Routes ..................................................................................................... 4

Air Transportation ........................................................................................... 5

Land Transportation: Road and Railways ........................................................ 6

Trade offs in Supply Chain Management ............................................................... 7

Sustainable Transportation: CSR and greener environment ...............................9

Global Supply Chain ........................................................................................... 16

Conclusion .......................................................................................................... 22

Recommendations .............................................................................................. 22


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Supply Chain Management

Introduction

Many companies have rules and strict codes of conduct that limit what is considered

acceptable. Being aware of these problems, the Institute for Supply Management has developed

principles and standards that can be used as guidelines for ethical behavior (Halldorsson, 2007,

284). Ethical supply chain is viable because ethical supply chain sets the basic global principles to

condition the behavior of the broader public sector, their suppliers, their advisors and others

involved in activities related to chain supply (Oliver, 2009, 246).

Modal Options

Generally whenever it has been discussed and analyzed regarding the most important

factors which could actually guarantee the success or failure of the brand, it could actually led to

making way for the development and understanding of imposing and establishing networks and

connections for a more competitive and analytical environment.

All this has been covered in the area of supply chain. Here, individuals tend to make way

for adopting those important areas and road links, which could actually add to the addition of the

establishment and maintenance of clients, vendors and even, in some cases, owning backward

integration as part of their network.

Being involved in a business, the basic objective for achieving and maintaining is to yield

maximum outcomes at the lowest cost. This, in comparison to other departments running in the

company, proves extremely crucial and critical in the case of supply chain management and the

people who are involved in logistics and transportation. Some of the many options that business


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and corporate managers involved in resource allocation and budgeting have to analyze and weigh

out with reference to business transactions include air, sea, railway, deep sea ways and others.

Their importance, merits and disadvantages shall be discussed below.

Sea Routes

Generally opted for B2B transactions and businesses, water transport ordeep sea ways (as

mentioned above) implies the level of transportation that could be defined as the event any vessel

such as a barge, tanker, boat, ship or a sailboat make way for travelling through sea from one

destination to another.

Now whenever transport is considered, the type of good, unit or commodity that is being

transported needs to coincide and align with reference to its own capacity to sustain for a long time

period. Oil, as an example, could be considered in this context, since oil holds enough capacity to

be stored and be in working condition at the time of dispatch even after travelling and moving

through sea for a travelling period of around two (2) to three (3) months.

However, temperatures, inspections and a strict protocol regarding leakages and

depreciation of oil quality are some of the most important factors, which could actually influence

the success or failure of the contract previously made.

As an added advantage, sea transport has been considered as amongst the most important

and the most effective methods of the different modes of transportation, which could actually

become extremely important and a key success factor for companies who are involved in the transit

and transport of non-perishable items. Alongside this, sea transportation is also the cheapest and

the lowest proposition any company could adopt with reference to transporting items and

commodities to different areas and different parts of the world.


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However, a major disadvantage to this modal option of transportation is the amount of time

that could be associated with the speed of transportation. In comparison to the other options

available to us, sea transportation could be considered the slowest because of the lengthy time

periods and intervals involved in the departure, processing and receiving the goods from start to

finish. Major risks and uncertainties are involved with reference to sea transportation;

contingencies, unrealized threats and uncertainties such as machinery faults, weather conditions or

even island attacks could actually add to the other expected budget of casualties and concerns

associated with bad circumstances and situations.

Air Transportation

Our second most important channel of distribution utilized and analyzed with reference to

the research undertaken is air transportation. Used for both B2B and B2C transactions, air

transportation implies the event where an air carrier, such as a full-size plan, a private jet, a

helicopter or the contemporary aircraft transfer and takes goods to different locations from host to

guest countries around the world.

Air transportation, by far is the second speediest service to adopt and avail for delivering

goods on a strict deadline. Researchers and analysts label it the second fastest option to choose

after spacecraft, entitling itself with the ability to save time, the most important component for any

business to make way for progress, expansion and building long-term customer relationships.

Unfortunately, the disadvantage with air transportation is that it does not tend to come

under the budget that easily. Air transportation is the most expensive route of transportation that

could be undertaken by any company could undertake. This is because with a speedy delivery,

airplanes and companies servicing in aviation tend to charge a premium for the timely, executive


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services that are being offered by the airplanes, making it costlier for companies to choose this as

the last resort in terms of consideration.

Land Transportation: Road and Railways

Road and Railways have come forth as effective and efficient systems, which could

significantly improve the current situation of companies and how they individually and collectively

contribute towards the transportation and immediate delivery from one place to another.

Initially adopted as a medium for transportation for humans from one destination to

another, trains and railway systems have been employed by different companies and organizations

around the world for transporting cargo, consignments, freight and different shipments from one

person to another. One of these days, people and individuals tend to make way for transporting

passengers in the front bogeys while the rear bogeys have attached freight and cargo ready to be

transported from one area to another.

To consider the facets, railway is amongst the most advantageous and the most beneficial

source of transportation to be adopted, when it comes to understanding and comprehending the

kind of issues and concerns that are involved in the development of establishing long-term,

competitive distribution and transportation networks.

However, it must be comprehended that a major disadvantage could be the kind of issues

and concerns related to road links and channel railways should be established. In case any country

or the required destination does not have a close platform, there would be delays experienced when

it comes to dispatch and receiving of cargo through road links and railways.


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Trade offs in Supply Chain Management

The basic problems and concerns that are usually being addressed with individuals in

different organizations tend to make way for being resolved and rectified in the area of supply

chain management. These specifically include transport networks, distribution chains, inventory

management, purchases, logistics and other amenities that related to effectively, timely and safe

distribution of goods or services, depending upon the nature of the business.

To come to note precisely, there are several factors that act as driving forces of the supply

chain management towards the kind of business that people are involved in. However, there are

certain patent tradeoffs and the kind of issues and concerns that are involved and directly

influence, change, amend or even halt the timely execution and development of all activities that

are related to supply chain management. Some of the major causes involved are as follows:

1. Distribution Network Configuration: this implies the kind of location, date of delivery,

vendors and suppliers involved in the development and establishment of the networks,

cross-docks or even, in some unique situations, direct dealing and understanding with

the customer.

2. Distribution Strategy: here, it depends on the kind of channels that you as a facilitator

or as an intermediary to transport and transmit your immediate goods or contents

required for distribution. This could wary depending upon the kind of goods that are

being transferred and transmitted and the kind of destination and location where the

containers or cargo would be dispatched and received from the end customer.

3. Tradeoffs in Logistical activities: In order for this occur, the former two need to be

aligned, be coincided and at the same time should be in-scope together in order to

produce and yield the minimum lowest cost. This is by far the most important


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component, since supply chain management is all about delivering the right good, at

the right place on the right time and at the right price. Hence, careful analysis,

projections and speculations should make way for being the immediate driver for the

success and failure of the supply chain incorporated in the company.

4. Information: This factor is, although not the single most factor, yet hold enough

capacity to influence, persuade, amend and bring transformation in the current setup

and development of the system that has paved way for the development of your new-

born supply chain in the company or could change the dynamics of already established

routes and gates of the contemporary supply chain undertaken by the company.

5. Inventory Management: Another derivative of supply chain management implies the

kind of issues and concerns is the inflow and outflow of inventory. An inevitable

component on the financial statements of companies across the globe, managing the

inventory is amongst the most liquid assets or even a current asset which could notify

the company's current financial position. In particularly to manage and maintain the

supply chain of the company it must be understood and comprehend the kind of issues

related to inventory inflow, which could actually make way for adding more profit

company or even losses for the company, in case of storage for a longer period.

6. Cash Flow: The final countdown comes upon precisely how much profit has been

earned and the kind of performance the company closes, which reference of cash

inflows and outflows.


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Sustainable Transportation: CSR and greener environment

To understand the concept that lies behind corporate social responsibility, an in-depth

analysis of the concept and its associated terms and instances should be understood thoroughly for

any justifications to be made in the first place. Corporate social responsibility (CSR) has benefited

enormous recognition in the contemporary scenario. Nevertheless, arguments regarding CSR

appear to have displaced from the premise that corporations have other obligations aside from the

maximization of profits to the notion that corporations are able to abide by more liberal

obligations. A way of meeting the terms that is progressively being expended is by deliberate

initiatives. Modernistic CSR is by and large linked with voluntary non-binding patterns that

businesses hold fast to in an effort to be socially accountable.

There is greater cognizance of the demand for corporations to be accountable equally with

their altering ability. This consciousness is being elicited by corporations themselves; international

civil society, which has greater public examination and exercises force on corporations to behave

dependably; and the literal and possible menace of international legal action considering foreign

direct liability. It is heading to worldwide alterations, driving more liberal corporate social

responsibilities, and the growth of CSR worldwide criteria in the fields of environment, human

rights and anti-corruption.

To understand and begin defining the actual and a much more realistic approach towards

identifying the framework of corporate social responsibility, we shall adopt a model that would

help us entail the best and most effective measures and would help us chalk out major portions of

creating the best strategies for delivering wise duties and at the same time make way for

contributing towards the ethical and social responsibility imposed upon human beings.


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The first and most basic component that individuals could pave way for understanding and

comprehending is the level upon which the concept and construct of corporate social responsibility

(CSR) shall be implemented.

If one could witness and excerpt out of the flowchart mentioned below one could easily

identify three basic levels: one implies CSR at corporate philanthropy, which suggests the

diagnosis phase, the point where the company pertains to adopt and understand that there is an

important and significant need of laying down the foundations of CSR and incorporate them at the

basic business and skill set level so employees, both working at the officer level and the support

staff should be aware of the kind of work and casualties that are supposed to be done for the basic

motive of disseminating relevant information.

With basic targets such as polishing skill sets and providing financial aid, it becomes

relatively easier to relate to achieve short-term milestones and minor goals that contribute towards

the fulfillment of major targets and objectives that have been set by the organizations heads,

working at the executive level.

The next level implies CSR as risk management, which as the title suggests, implies filling

any gaps and loopholes that may hinder and halt the routine business proceedings in the company.

As compliance has been mentioned, the level of CSR now has been imposed upon the more

technical, operational aspects that have been coined and incorporated in the organizational

framework. With companies now pertaining to coincide and align their processes with greener

targets and objectives, adopting effective and efficient risk management portfolio shall enable

corporations to keep track of their forecasted and actual performance.


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Furthermore, with a strong hold upon the processes, it would be easier to keep an eye upon

any deviations or process malfunction that may have previously occurred, making the organization

a robust and fully complied organization in accordance to green rules and regulations.

Finally the last stage, when all personnel skills and processes sets have been coincided and

aligned together, yield to the CSR as value creation. One must understand that although

knowledge can pertain to change the way you think, a lot of experience, practice and familiarity

with the concepts taught and implemented should be undertaken. Once all clutter and errors have

been eradicated and removed from the system, the only point and the most difficult step that

remains is to create a smooth, close-knit relationship between the employees and the new and

improved processes have been implemented in the organization.

It should be considered that people dont resist change, they resist being changed.

Whenever a change has been implemented in the frame of the organization, one major question

should be answered: was the change successfully implemented? If yes, then your change has been

implemented.

Drawing the line has always been a delicate, yet difficult task for a lot of individuals

performing their duties at the leadership role (. While the company maybe at the point of fully

adopting CSR as an important tool in the company, it would only be applicable with the joint

consensus and common agreement of the shareholders involved in the company and investing in

the operations.

According to my point of view, the basic demarcation which may occur should be for the

profits; being businessmen, at the end of the day, the kind of returns, primarily monetary, are to be

analyzed that how much benefit has been received of the otherwise attempt made to adopt CSR in

the organization. Hence, careful reasoning and strong evidences should be forwarded for the


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purpose of creating the best and most effective measures of business operations and corporate

responsibility.

Loyalty may likewise be broken because of better business opportunities with different

suppliers. The ethics of business negotiations between different corporations presents comparable

issues. As Albert Carr has argued, there is a close link between the ethics of business competition

and negotiation, but there is a wider degree of latitude to the game of negotiation (Carter, 2010a,

180). Most would agree that (here is nothing wrong with being rude, as long as one plays by the

rules of the game.

As economists emphasize, competition is necessary for business innovation, but it can also

be destructive insofar as businesses use forceful measures to obtain market share or destroy other

competitors. In addition to the issue of aggressive competition, the ethics of oligarchic and

monopolistic practices are of concern in free markets. State intervention in such practices firms

with dominant market share is occurring in many countries in order to protect the ethics of free

markets. In the context of liberalization and globalization of international markets, this issue of the

legal and ethical limitations of market behavior is becoming more important (Carroll, 2009, 497).

Corporations may not only have to be aware of their own relations with competitors and

suppliers, but also to investigate the ethical dimensions of their supply chain. Ethical supply chain

management involves investigating the ethical issues pertaining to all the members of the business

network. In relation to developing countries, the firm would probably have to deal with

questionable working practices of business partners in these countries (Brumsen, 2010, 378). A

widespread practice of supply chain ethics management is represented by the fair trade movement,

which was discussed previously. To provide proof of supply chain ethics firms, are frequently


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requested to give a transparent description of the production history of their goods (Beamon, 2008,

20).

Supply chain is recognized as the major opportunity for business improvement for almost

all the industrial sectors. The sector of automotive is the furthermost advanced in its supply chain

management but there are some major issues which are being faced by the conventional volume

car manufacturers. If the supply chain is managed effectively by the automotive sector than it can

bring substantial outcomes and the benefits would continue.

The needs of the customers should be met reliably, quickly and consistently on high service

levels. But this was not being done by the conventional volume car manufacturers and they were

facing problems in making their customers satisfied. The main issue is to keep up the quick and

rapid pace of technological advancements. Growth and change is needed to make a place in

saturated market. While keeping costs level under control, the quality and diversity is difficult to

achieve.

The marketing strategies are old and the companies do not focus on innovative ideas. Many

industries have just started to recognize the importance of supply chains, and are not able to make

progress. The demand of the customers could not be met by such industries. They face ultimate

issues of cost effective processes and in providing compelling value to the customer. The

conventional industries are not able to connect extensively with suppliers and customers. They lack

continuous improvement required in saturated markets. The strategies built are not up to date and

does not contain such features which makes the product different from others. Flexibility is absent.

People, processes and systems are not adaptive and innovative.

Companies have identified to the demand for being dedicated towards Corporate Social

Responsibility. But still a large number of companies have been taking up some style of


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humanitarian actions for its stakeholders. Fostering a powerful business culture which focuses

Corporate Social Responsibility (CSR) competencies and values is needed to obtain the

advantages. The staffs of a corporation engage a major place in improving such a tradition which

defines values and competencies of CSR. Perhaps all businesses discuss about their endeavours for

CSR which has become an approach of assuring that the company is fulfilling all the

responsibilities towards society and so is entitled for the permission to perform. It confirms that the

company can develop on sustainable ground. These actions of CSR ranging from small plans to

bigger plans for social welfare sustainable exercises vary from company to company depending on

the resources obtainable to a company for performing important exercises. Business exercises of

successful and big corporations, with plenty of resources at their end, have set the style for being

dedicated to sustainable exercises. Different companies around the world demonstrate their

dedication to social responsibility.

Though the implementation of these performances relates effort, time, and resources yet the

business corporations have identified that it (CSR) is one of the essential approaches in which a

company can differentiate itself from its opponents. The intangible and tangible advantages

connected with for company are great.

A strong tool like CSR not simply increases the image of brand and status of the business

but moreover guides to development in customer loyalty and sales, and enhanced capability to

attract and maintain staffs. The term CSR has, as a consequence, engaged important position in the

strategies and plans of the companies in the modern period.

Different organizations are there which recognize CSR as performing various

responsibilities. Rather in its genuine situation CSR comprises a powerful dedication to social


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responsibilities and internalization throughout the culture of corporation which lays concentration

on the performance of the responsibilities towards the staffs and connecting them in behaviors.

The current composition is an effort to reveal that how the employee can become the brand

ambassadors of the companies and that feel good factor can saturate out to others, particularly

clients and consumers. To appropriate that it will attempt to propose a strategy of action through

assessing the activities of CSR for different companies to encourage strong business citizenship

which is essential for the expansion of a tradition for social responsibility. The notion of corporate

social responsibility (CSR) according to study (2007) contains the duties that trades have to the

cultures, within which these businesses perform.

The issue of corporate social responsibility has developed from a constricted marginalized

idea into a complicated multifaceted view that has become a major part of the modern business

decision making procedure. The sources of corporate social responsibility can be observed back to

the literatures on CSR. Particular situation concentrated simultaneously add value to the company

and guide to constructive societal modifications.

Porter and Kramer (2002: 68) defined that, no inherent contradiction is there between

developing aggressive situation and making a sincere dedication to bettering culture. In fact, as

people have observed, the more closely a companys policy is connected to its aggressive situation,

the greater the contribution of corporation to society will be.

People will dwell largely on the development of CSR in Europe, because, both in quantity

and size, European corporations have played a dominant role in the capitalist world economy and

have influenced corporate development in many nations. Particularly in the age of globalization,

there is a fungible value to multi-national business in a particular situation. An important

discussion about CSR took position in the 1930s between the scholars of law, over the duties owed


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through business directors and managers to their shareholders and other people directly affected by

the corporation.

Corporate directors had long been held to have some fiduciary duty towards their

corporation and shareholders. Nonetheless, statutes and corporate charters generally granted

corporate managers and directors broad powers to act according to their discretion in the

management of corporations. Using a different approach, Professor Dodd of Harvard wanted to

give corporate business statesmen leeway to help constituents beyond the shareholder; he

proposed that they be treated as agents not of shareholders, but for their corporations.

Unwilling either to abandon the safe harbor of shareholder primacy, or to relinquish

prospects for a corporation responsive to all groups it affected, Berle and Dodd reflected tensions

that would underlie future debates over CSR. However, both concluded that large corporations had

amassed such power in modern Europe that, if they were not managed in the interest of society,

they would soon hold a commanding position over British society.

Yet each admitted that there was no clear-cut legal doctrine setting forth just how corporate

managers could favor community interest over shareholder wealth. Following the research, the

debate over CSR essentially lay dormant for nearly twenty years. Beginning in the mid-l 950s,

there again emerged a social discussion over CSR as aspect of that wider discussion of that

decade for the rising strength of business in politics and society.

Global Supply Chain

The definition of "supply chain" includes the following three functions:

i. The supply of products to a manufacturer;

ii. The manufacturing process; and


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iii. Distribution of finished products to consumers through a network of distributors

and retailers.

Companies participating in the various stages of this process are linked together by a

supply chain. To facilitate the flow of products, information flows from one end to another of the

chain, between suppliers and customers. Such exchange of information enables all parties to plan

meeting the current and future needs. More companies in a supply chain are able to integrate and

coordinate their activities; the more likely they are to optimize the flow of products from supplier

to consumer and to respond effectively to changes in demand.

Technical progress, liberalization of markets and the diffusion of global production systems

are creating new opportunities and challenges for industrialized countries as well as for the global

market economy. One of the most significant consequences of globalization is represented by

supply chains progressively becoming more international and complex. This phenomenon is

gradually increasing: in year 2000 firms sourced between 21 and 30 percent of their total annual

spending on a worldwide basis. In 2005, the total non-domestic spending increased up to values

between 31 and 40 percent, compared to year 2000.

This procurement strategy, in its more advanced form, is known as global sourcing. The

term global sourcing gives a far different meaning than international purchasing, which can be

defined as the acquisition of raw materials, components and subassemblies from international

sources for use in fabrication, assembly or for resale, regardless of whether the import source is

internal or external to the company. In fact global sourcing covers a wider meaning: integration

and coordination of procurement requirements across worldwide business units, looking at

common items, processes, technologies and suppliers.


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The above definition highlights the ability to schedule, coordinate and synchronize the

variety of the goods exchanges and information flows from source to destination as a key factor.

Transport and logistics, according to this new point-of-view, turn from costs to keep under control,

into strategic levers, being the basis for the supply chain redesign. Global sourcing structures and

processes, including logistics networks and activities, become increasingly important to the

effectiveness of global sourcing. Moreover, global sourcing creates the need to efficiently plan

intercontinental transportation. Geographical distances in global contexts increase not only

transportation costs, but also make it more complicated to solve the trade-off between inventory

and physical distribution costs.

Low-cost off-shore sourcing strategies can end up as high-cost supply chain outcome.

Consequently, in order to obtain the best supply chain outcome, logistics patterns (e.g. the choice

of transport mode and logistics networks configuration) should be changed as well.

The growth of globalization and the consequent challenges for management have

motivated both practitioners and academics' interest in global supply chain management. Recent

studies, which considered the extent of this phenomenon, concentrate on some relevant

aspects/decisions that can be subdivided into three main groups: strategic alignment of the supply

chain, coordination of the players operating in the global supply chain and design of the global

logistics network.

Studies on global manufacturing strategies (e.g. facility location and vertical integration)

belong to the first research stream. Depending on the level of vertical integration, there can be

different supply chain configurations. Production facility location and the distance from the final

markets involve a different degree of responsiveness and agility of the supply chain towards the

fluctuations of the market demand.


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Some current researches try to evaluate the benefits of a supply chain strategy based on the

concept of lean and agile. With respect to the choice between the lean and agile

approaches, there should be no real contrast between them. On the contrary companies should

integrate the appropriate and coherent aspects of these paradigms in their specific supply chain

strategy.

The second research stream deals with the management of global supply chains, which are

more complex than local ones. Different local cultures along with diverse languages and practices

decrease the effectiveness of such processes like demand forecasting and material/production

planning.

Some authors studied the need for integrating facilities and for sharing information in

global supply chains and the consequent benefits. To this aim, in a recent study, Zeng (2003)

proposed a material and information flow model, while other studies focus on demand planning

coordination with suppliers. Dealing with tactical production-distribution allocation problems,

various mathematical programming models have been introduced. The most advanced ones take

into account price/exchange as well as risk effect.

With respect to the third group of researches, the focus of the present study, the

configuration of global logistics networks implies the choice of the most suitable international

transport mode (mainly ocean container shipping or airfreight), the design of infrastructures for

freight consolidation and for serving end markets and the definition of the number of echelons

composing the logistics network.

Prior literature analyses global logistics network design from two main perspectives: from

global carriers' point-of-view (international forwarders or logistics service providers), or from

manufacturers' side. In the first case the studies deal with the use of transport infrastructures or


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logistics models like hub and spoke. The attention is often placed on shipment consolidation

strategies, as well as internationalization and globalization policies of freight forwarding

companies and logistics service providers. Papers about manufacturers' point-of-view consider

transportation systems as an origin-destination process characterized by a transport unit cost but

paying little attention to the structure of the transport service and to the relative implications on the

entire supply chain.

Various relevant studies for the redesign of the logistics network on a global scale have

been developed, even if they do not allow significant generalizations of the results. Only in the

most recent studies, a deeper analysis on the possible configurations for logistics networks is

provided.

For instance, Zeng (2003) considered three global transportation service categories

(airfreight, full container load shipping, less than container load shipping), including inventory

costs as part of the decision making problem. Lovell et al. (2005) proposed taxonomy for global

network design mainly based on product value density and throughput volume.

Cheong et al. (2007) evaluate a configuration, which implies the adoption of consolidation

hub facilities in Asian sourcing countries (to collect shipments coming from several suppliers) and

the delivery of the consolidated shipments to the respective worldwide manufacturing plants. This

study includes shipping frequency as a key element to be taken into account in ocean shipping

planning.

Logistics comes under supply chain management. Logistics is divided into inbound and

outbound logistics. Inbound logistics deals with internal transportation of firms such as moving


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raw materials from supplier to manufacturer. Outbound logistics deals with storage of data in

warehouses and the distribution of products.

Logistics is the professional key element of successful disaster management. It is a support

service for relief operations in disaster and ongoing programs of the International Federation of

Red Cross and Red Crescent. The basic task of the logistics function is to provide appropriate

goods and services, under appropriate conditions, the quantity required and in the places and the

time needed. (Ketchen & Hult, 2006, pp. 573-580)

In the humanitarian field, logistics refers to the efficient and effective form of emergency

relief from its origin to the beneficiaries. In a humanitarian context, the coordinated management

of the supply chain to an effective response and optimal use of scarce resources are becoming

crucial. It save lives and reduce the effects of disease due to inhumane living conditions.

Logistics activities, then, must be managed from a global perspective that considers the full

term of the supply-manufacturing process, delivery, greater exchange of information, more

involvement of all companies, sharing responsibilities, and with the active participation of each a

partner in decision-making and in addressing all the problems that arise (Ireland & Crum, 2005,

pp.123). This means, changing the fragmented and by function, into a horizontal and processes.

Positioning the supply chain and logistics within the establishments, it is possible to

recognize the advantages that the company perceives as the product is delivered at the time, place

and appropriate state, meeting the expectations of partners chain and customer (Makadok, 2001,

pp. 387).


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Conclusion

As global sourcing dramatically alters the landscape of business activities, there needs to be

a similar change in the way in which logistics networks are designed. However, the performed

literature review showed some relevant research gaps in the design of logistics networks in global

sourcing contexts, from both a theoretical and a practical point-of-view.

With reference to the theoretical implications of the present research, this paper contributes

to the development of the current debate on the considered issues, thus expanding the existing

knowledge on the configuration of international logistics networks. In particular, we identified five

logistics network configurations, implying the adoption of international container shipping and we

developed a framework to support the choice of the most suitable logistics network option from a

manufacturing company's or a retailer's point-of-view. We showed that configuration 1 (direct

shipment with FCL), a widespread solution, does not always represent the most cost-effective one.

Recommendations

On the basis of the analysis of different scenarios we proposed taxonomy to support the

choice of logistics network configurations considering some key elements such as: the overall

demand, the demand between suppliers, the suppliers' geographical dispersion, the product value

density and the differential labor cost.

The proposed taxonomy, even if it has been developed considering a specific context (i.e.

international shipments from Far East to Europe), can be profitably applied to different countries of

origin and destination, reflecting their diversity. In fact, the specific features of each potential

country to be taken into account (e.g. number and location of ports, transportation network


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development stage) mainly impact on the definition of the threshold values considered for the

choice among the different logistics network configuration options.

Moreover, the proposed taxonomy could be integrated with some considerations about

purchasing strategies (e.g. multiple sourcing vs. a limited number of suppliers) and business

relationships with foreign countries, established not only for sourcing activities (as supposed in the

present paper) but also for sales purposes. In fact, in this paper the CH is assumed as a

node/facility for optimizing the sourced flows. The overall assessment could result in different

outcomes if the CH had to fulfill the orders for the local market as well.

The proposed framework can be useful also for those logistics service providers operating

as fourth party logistics (4PLs), involved in supply chain planning and design on behalf of global

clients rather than merely providing transportation and materials handling services.

With regards to its practical implications, the presented framework provides supply chain

managers and decision makers with a useful tool for supporting the design of global logistics

networks. By implementing this framework, decision makers will be able to study different

scenarios and, therefore, to determine the optimal logistics network configuration with respect to

the existing and prospective features of their supply chain.


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Modes of Transportation and Sustaiable Transport related to supply chain

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