How Could an Auto Manufacture Use Transportation to Increase the Efficiency of Its Supply Chain?

Transportation refers to the movement of product from one location to another as it makes its way from the beginning of a supply chain to the customer's handle. Many manufacturers & retailers have found that they can use state of the art supply chain management to reduce inventory & warehousing costs while speeding up delivery to the end customer and at the same time they can do exactly opposite i.e. spending less on transportation in order to be efficient. There are two keys players in any transportation that takes place within a supply chain. The shipper is that party that requires the movement of the product between two points in the supply chain. The carrier is the party that moves or transports the product. So a company can use slower but cheaper ground transportation to ship the product, making the supply chain efficient but limiting its responsiveness.

Two other parties also have a significant role and they are owners and operators of transportation infrastructure.

Role in the Supply Chain

Transportation has a large impact on supply chain strategies i.e. on both responsiveness and efficiency. The mode and the type of transportation which a firm or a company is using has direct impact on its inventory and drivers as well. Quicker transportation comes at higher cost and in a responsiveness strategy where as in order to have efficiency a company must focus on slower and cheaper modes or transportation. Supply chain uses following modes of transportation

1. Air

2. Package carrier

3. Truck

4. Rail

5. Water

6. Pipeline

7. Intermodal

Role in Competitive Strategy

Inventory plays an important role in a supply chain's ability to support a firms competitive strategy. Competitive edge can be gained on the basis of following

3. Responsiveness

4. Cost efficiency

If a firm wants to be responsive a company must increase it transportation cost for quicker and faster delivery

Where as for efficiency it is completely opposite.

What does an Auto manufacturer Means ?

The automotive manufacture industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the worlds most important economic by revenue. The term automotive industry usually does not include industries dedicated to automobiles after delivery to the customer, such as repair shops and motor fuel filling station.

BMWManufacturer's

Bayerische Motoren Werke AG (BMW), is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini brand, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motored and Husqvarna brands. BMW is known for its performance and luxury vehicles, and is in fact global leader in premium car sales.

As BMW is a multi-national company, they are making multiple automobiles due to which their strategy is different for different products when it comes to transportation driver i.e. a logistics driver. .

Some times they are responsive when they take orders such as making of Lamborghini because they have to deliver quickly or in a given time bur they use their transportation of cars from warehouse to showrooms efficiently .

More than fifty percent of all components within BMW's vehicles are being developed at BMW's suppliers, including the respective production processes due to schic they manage their transportation efficiently.

For transportation the concept of vertical integration is very important in order to be efficient.

Design of transportation network

BMW has