BPMG 3013 TRANSPORT PLANNING & POLICY

TITLE:

ROUTE TRANSPORTATION PLANNING FOR OPTIMIZING RISKS IN

INDUSTRIAL SUPPLY CHAIN

PROVIDED FOR:

DR. KAMAL IMRAN BIN MOHD SHARIF

PREPARED BY:

NAME MATRIKS NUMBER

NUR FARHANI BT ZAKARIA 239605

NORSYAL SHABILLA BT MOHAMED NOR 241363

SHARIFAH FARAH WAHIDAH BT SYED MOHD SAFRI 242918

NUR AFIQAH BT DAGANG 240265

MORAD SOBHEE 231218

NURUL HANANI BT M YUSUF 240992

NURUL HAIQA BT IDRIS 240100

MA JIN 248102

MAHIRAH BT ABD HADI 238678

IZZIANA BT ISMAIL 238222

AHMED ALI HASSAN 235842

YANG YOUXIANG 235920

NUR SUHAILA BT CHE RIZA@MOHD SAIFULAZRI 240243

HAMDI HASSAN MOHAMED 231282

1.0 INTRODUCTION

Industrial transportation is a transport which is used by industrial enterprises to

move objects worked on and products in the production area. Industrial transport is
both an integral part of the production process and an important link in the general
transportation system. The annual volume of cargo carried by industrial rail and motor
vehicle transport is about 1.5 times greater than the volume of freight hauled by
general rail and motor vehicle transport. Workers employed in industrial transport
constitute about one-fourth of the total number of industrial workers.

Industrial transport is divided into internal and external transport depending on

the area in which the conveyance occurs and its relationship to the production
process. industrial enterprises use the following types of transport: railroad, motor
vehicle, water, industrial truck, conveyor, cable, monorail, and pipeline.

Technical progress in industrial transport is taking several directions. The

organization of operations is being improved by introducing integrated production
technology regulating the entire production process, including operations performed
by industrial transport. The operation of industrial transport is being more closely
coordinated with main line transport. New ways of organizing rail and motor vehicle
transport are being developed by combining these types of transport into large
industrial and inter industrial enterprises and combines. Specialized repair bases are
being established for transport equipment, Automatic control is being introduced in
industrial transport. However, industrial transportation is facing problems such as
pricing issues, customer value chain issues and keeping up with the evolving
technology trends. Also the possible solutions to these problems will be further
discussed.
2.0 PROBLEM

Problem that can be seen throughout the industrial transportation could be in view
of cost and pricing, customer value chains and the evolving of technology. In terms of
Cost and pricing in industrial transportation, Dr. Rodrigue.J and Dr. Notteboom.T
(2017) defined clearly about the cost and rate(pricing) in transportation and also the
difference between cost and rate (pricing) in industrial transportation. While in term
of pricing strategies, Lohrey.J (2018) gives a comprehensive discussion about the
significance of pricing, pricing strategy options and also revenue management for
logistic service pricing strategies. However, Wikibooks (2017) has introduced the
relationship between economic and also the transportation pricing which means the
economic issues may affect the pricing of transportation itself or in economic terms, a
negative externality is created. In order to solve this problem some economist
proposed that there should be a tax on congestion.

Customer satisfaction and service quality are closely related as that is how
companies can improve their processes from marketing to shipping. Customer
satisfaction has many aspects and is not just about the quality of the product
(Kristianto et al., 2012). In particular, it has been determine that logistics element is
important in order to meet customer demand. From the 1990s some authors
demonstrated a positive correlation between customer satisfaction requirements and
delivery performances (Sharma et al., 1995). Cermak et al. (2011) even discussed the
fact that customers can involve in the detail and delivery of the services. Moreover,
suppliers have to respond to customer’s demand increasing their capability by
understanding all the processes including the logistics. Logistics has been defined as
being crucial to accommodate the internal operations of an organisation with the
supply chain processes to increase customer satisfaction. For instance, Bowersox et
al. (2002) investigated all the supply management processes which can affect logistics
and customer satisfaction and have a big impact on customer satisfaction leveraging
on order processing, inventory management, transportation, handling and packaging,
as well as facility network design.
 According to Chan and Daim (2012), the pace of globalization and intensified
competition from worldwide players have been accelerated and become quicker,
hence, technological innovation has assumed a more critical role in advancing
financial improvement and enhancing national competitiveness. This can be
supported by Williams (1975) who argues that the technology should not be neglected
in transportation, warehousing, inventory control and order processing due to the
evolving of new era. The application and development of technology would give
significant effects on the field of industrial transportation. It means that this
development and evolving of technology can enhance the competitiveness among
other.

3.0 SOLUTIONS

1. The Solution Of Cost And Pricing In Transport

Transportation costs can be a significant part of a company’s overall logistics spend.

With the increases in the price of fuel, the proportion allocated to transportation can
be upward of fifty percent. This cost is passed on to the customer and the price of
goods continues to rise. Transportation costs are a major target for companies to
reduce there are several transportation strategies that can be used by management to
help reduce costs:

 Fewer Carriers

With transportation costs being so high, management must adopt strategies that will
help identify transportation issues in the supply chain and develop solutions to solve
those issues. The transportation manager is given the task to provide the best quality
transport, at the right time, and at the right price. By reducing the number of carriers,
the amount of work offered to the remaining carriers will increase. By offering
vendors a larger volume of work, the carrier should be able to offer lower rates across
all routes. It may be the case that on some routes the rate is not as good as was
negotiated with an another carrier, but overall the rates across all routes should be
lower.
  Single Sourcing

Some companies believe that the best negotiated prices can be achieved when they
use a single source for all their transportation. This is common for purchasing
departments to use a single source for a range of products that a single vendor can
provide.

The same can be achieved for transportation. By offering all transportation out to bid,
via a RFQ (Request for Quotation), a company can provide carriers with a detailed
explanation of what they require, which may fall outside of what is normally provided
by a common carrier.

If they wanted to use a single source, a company would have to thoroughly evaluate a
bidder’s ability to provide the service and whether the carrier has the stability not fall
into bankruptcy within the timeline of the contract. If the winning bidder fulfils the
needs of the company, and has been fully evaluated, a company could gain significant
transportation savings using a single carrier. To ensure you have an optimized supply
chain, you want to make sure you're delivering what your customers want, when they
want it. And you're achieving that goal by spending as little money as possible.
Reducing your transportation costs can be a significant way to spend less money,
without impacting customer service.

 Supports Clusters And Agglomerations

Investment in transport, especially public transport, supports clusters and clusters in a

variety of ways. First of all, in metropolitan areas, due to the limited urban space, the
growth rate based on car travel alone will slow down. Effective planning of
transportation can overcome this limitation and strengthen aggregation by allowing
more people to come together in higher density developments.

Secondly, proper transportation investment supports industries and enterprise clusters

in ways that support each other more closely, thereby increasing productivity and
creating a range of activities. Finally, efficient transportation reduces the time
distance between the suburbs where the workforce lives and the city center.
  Increases Productivity

When transport improvements improve the accessibility of people and businesses to

work, services, goods, and activities, productivity increases. This increase may be due
to shorter travel time and improved infrastructure. Because the labor market is closer
to the labor market temporarily due to the increase in travel time, the work efficiency
of the company has improved.

Business productivity also appears in other areas. For example, transportation

improvements may improve the delivery time of freight. If truck drivers can get to
their destination faster, they can run several more times in their daily shifts to increase
efficiency. Increasing productivity of workers and businesses in turn will increase the
productivity of metropolitan areas affected by enhanced transportation systems.

 Enhances Jobs And Labor Market Accessibility

Another economic benefit of improving transportation is the large number of

employees in the job market. This may come from new transit or commuter rail lines,
so that employees can reach previously inaccessible jobs. Or, improving the road may
reduce employees' time on the bus or bus. In general, employers can better equip their
employees with appropriate work based on job requirements and the skills of their
employees.

At the same time, new or improved transportation options have increased the
opportunity for people to directly obtain more job options, making the area more
attractive. Taking into account the Millennials’ emphasis on mobility and the desire to
abandon car ownership, access to employment and entertainment in walking, cycling,
and transit-access areas has become a key factor in recruiting this important
workforce.
 2. The Solutions Of Customer Value Chain – demand and expectation

As a supplier company, it is necessary to constantly think about what measures to take

in order to continuously reduce the amount of money, time, and troubles that
customers pay for each aspect of their purchase and use. In fact, the customer value
chain is a system that extends and expands from your product.

 Improve The Efficiency Of Order Processing

Businesses first need to establish and improve their own order management system.
The application of the order management system is a prerequisite to guarantee the
efficiency of order processing. From customer orders, sources of goods, optimal
solutions, step-by-step detailed information to customers. And the saturation of the
warehouse should also be provided to customers. Support different types of orders,
such as rush orders, specified time, specified routes and other customer requirements.
From the time the customer places an order to the receipt of goods, the delivery
information of the goods is constantly updated so that the customer can understand
the delivery of the goods in detail.

 Establish And Improve Warehouse Management System.

Establishing Warehouse Management System (WMS). The purpose of a computer-

controlled warehouse management system is to independently implement various
functions of warehouse management: receipt, inventory at the right place, inventory
management, order processing, sorting, and distribution control. The distinctive
features of application systems that focus on the business decisions of the
warehousing industry include a very flexible billing system, accurate and timely
accounting systems, and a well-functioning customer management system, providing
decision support information for warehousing operations. WMS supports the
execution of enterprise warehousing and distribution through different functional
modules and adapts to changing business strategies, e-commerce, customer needs,
modern equipment, order size and structural environment, and improves operational
efficiency and resource utilization to reduce logistics costs and enhancements.
Customer service level.

 Improve Transport Efficiency And The Packaging Of Goods

Use system viewpoints to continuously optimize the allocation of transportation

resources, improve the use of management techniques and means, improve the level
of enterprise transportation management, establish the concept of logistics strategy
cost management, pursue the minimization of the cost of logistics transportation
throughout the entire supply chain and the entire circulation process, and constantly
explore the cost of transportation Reduce potential and continue to reduce the level of
logistics transportation costs. Reasonably choose the mode of transportation. To
organize multimodal transport rationally. The use of LTL, containers, lame air
transportation and other methods to expand each transport batch, reduce the number
of transport

3. The Solution Of The Evolving Of Technology

 Urbanisation Creating Pressure On Mass Transit Systems

The greatest challenge for transport is rapid urbanization around the world. The
United Nations forecasts that over 80% of the world's population will be living in
cities by 2050 and the ability to provide good transport services can make the
difference between a city being an engine for national economic growth, or a catalyst
for inequality and economic stagnation.

 Connected And Automated Transport (CAT)

Technologies can contribute to increasing the efficiency and safety of the transport
system. They can improve traffic flows, optimisme infrastructure and public transport
usage and foster multimodal transport solutions. Although a number of pilot
demonstrations of CAT technologies are taking place in Europe, there is still a need
for large-scale testing to determine the technological readiness, reliability and safety
of automated transport functions in complex situations. This will require addressing
key issues such as the performance of innovative automated transport technologies, a
regulatory framework which supports deployment of CAT solutions and technologies,
acceptable levels of cyber security, as well as new business models. The Strategic
Transport Research and Innovation Agenda (STRIA) Roadmap for Cooperative,
Connected and Automated Transport defines future research needs for developing and
deploying CAT technologies and systems for all transport modes

 Electronic Data Interchange

EDI is the use of an internationally recognized standard format for information in the
trade, transportation, insurance, banking, and customs industries. Through computer
communication networks, EDI enables data exchange and processing among relevant
departments, companies, and companies, and completes Trade-centered business
process.

EDI is not a simple data exchange between users. EDI users need to send information
in accordance with internationally accepted message formats. Recipients also need to
process messages according to the stipulated grammar rules of the world and cause
EDI of other related systems to be integrated. The entire process is automated,
without manual intervention, reducing errors and increasing efficiency.

 Warehouse Management Systems

A WMS can provide visibility into an organization's inventory at any time and
location, whether in a facility or in transit. It can also manage supply chain operations
from the manufacturer or wholesaler to the warehouse, then to a retailer or
distribution center.

There are many types of warehouse management systems and implementation

methods, and the type usually depends on the size and nature of the organization.
They can be stand-alone systems or modules in a large enterprise resource planning
(ERP) system or supply chain execution suite. Implementation of WMS can help
companies reduce labor costs, improve inventory accuracy, increase flexibility and
responsiveness, reduce picking and shipping errors, and improve customer service.
Modern warehouse management systems run real-time data, enabling organizations to
manage the latest activity information such as orders, shipments, goods receipts and
goods movements, etc.

4.0 IMPACT

Impact of Industrial Transportation

The growth of the Industrial Transportation depended on the ability to transport raw
materials and finished goods over long distances. There were three main types of
transportation that increased during the Industrial Revolution: waterways, roads, and
railroads. Transportation was important because people were starting to live in the
West. During this time period, transportation via water was the cheapest way to move
heavy products (such as coal and iron). As a result, canals were widened and
deepened to allow more boats to pass. The roads also improved immensely during this
time period. Previously, people traveled using animals or by foot, but there were
many problems with the conditions of the roads. In 1751, turnpikes were created for
easier transportation, especially for the horse-drawn wagons. These improvements on
waterways, roads, and railroads all made traveling safer, and it allowed goods to be
moved more efficiently.

ENVIROMENTAL

The environmental impact of industrial transportation is significant because transport

is a major user of energy, and burns most of the world's petroleum. This creates air
pollution, including nitrous oxides and particulates, and is a significant contributor to
global warming through emission of carbon dioxide (Gravir, 2003). Within the
transport sector, road transport is the largest contributor to global warming. Energy
use and emissions vary largely between modes, causing environmentalists to call for a
transition from air and road to rail and human-powered transport, and increase
transport electrification and energy efficiency.

Other environmental impacts of industrial transport systems include traffic congestion

and automobile-oriented urban sprawl, which can consume natural habitat and
agricultural lands. By reducing transportation emissions globally, it is predicted that
there will be significant positive effects on Earth's air quality, acid rain, smog and
climate change.

The health impact of transport emissions is also of concern. A recent survey of the
studies on the effect of traffic emissions on pregnancy outcomes has linked exposure
to emissions to adverse effects on gestational duration and possibly also intrauterine
growth.

As listed above direct impacts such as noise and carbon monoxide emissions create
direct and harmful effects on the environment, along with indirect impacts. The
indirect impacts are often of higher consequence which leads to the misconception
that it’s the opposite since it is frequently understood that initial effects cause the
most damage. For example, particulates which are the outcome of incomplete
combustion done by an internal combustion engine, are not linked with respiratory
and cardiovascular problems since they contribute to other factors not only to that
specific condition. Even though the environmental impacts are usually listed
individually there are also cumulative impacts. The synergetic consequences of
transport activities. They take into account of the varied effects of direct and indirect
impacts on an ecosystem. Climate change is the sum total impact of several natural
and human-made factors. 15% of global CO2 emissions are attributed to the transport
sector.
ECONOMIC

The transport sector is an important component of the economy and a common

tool used for development. This is even more so in a global economy where economic
opportunities have been increasingly related to the mobility of people, goods and
information. A relation between the quantity and quality of transport infrastructure
and the level of economic development is apparent. High density transport
infrastructure and highly connected networks are commonly associated with high
levels of development (Bell, 2008). When transport systems are efficient, they
provide economic and social opportunities and benefits that result in positive
multipliers effects such as better accessibility to markets, employment and additional
investments. When transport systems are deficient in terms of capacity or reliability,
they can have an economic cost such as reduced or missed opportunities and lower
quality of life.

At the aggregate level, efficient transportation reduces costs in many economic

sectors, while inefficient transportation increases these costs. In addition, the impacts
of transportation are not always intended and can have unforeseen or unintended
consequences. For instance, congestion is often an unintended consequence in the
provision of free or low cost transport infrastructure to the users. However,
congestion is also the indication of a growing economy where capacity and
infrastructure have difficulties keeping up with the rising mobility demands.
Transport carries an important social and environmental load, which cannot be
neglected. Assessing the economic importance of transportation requires a
categorization of the types of impacts it conveys. These involve core (the physical
characteristics of transportation), operational and geographical dimensions:

 Core. The most fundamental impacts of transportation relate to the physical

capacity to convey passengers and goods and the associated costs to support
this mobility. This involves the setting of routes enabling new or existing
interactions between economic entities.

 Operational. Improvement in the time performance, notably in terms of

reliability, as well as reduced loss or damage. This implies a better utilization
level of existing transportation assets benefiting its users as passengers and
freight are conveyed more rapidly and with less delays.
  Geographical. Access to a wider market base where economies of scale in
production, distribution and consumption can be improved. Increases in
productivity from the access to a larger and more diverse base of inputs (raw
materials, parts, energy or labor) and broader markets for diverse outputs
(intermediate and finished goods). Another important geographical impacts
concerns the influence of transport on the location of activities and its impacts
on land values.

SOCIAL

Transport infrastructure is crucial for the development of countries, regions and

cities. Indeed, better infrastructure implies a greater outlay of public capital and,
hence, higher productivity of private factors, fewer transport costs for firms and
greater accessibility to territories. For this reason, a number of empirical studies have
used production or cost functions to examine the impact of infrastructure on economic
growth, and while most focus on aggregate amounts of public capital some
distinguish between roads and other types of infrastructure (S Bamberg, 2007). The
geographical unit of analysis varies across these studies, from the national to the
regional or local level.

The impact on employment of a better endowment of transport infrastructure in

one region on its neighbors is not clear a priori. Indeed, improved infrastructure may
give rise to a competition effect associated with the agglomeration of activities in the
5 region with better infrastructure and a complementary effect associated with
improved access to other regions or international markets. Port traffic is such a
heterogeneous mode that it is particularly difficult to predict the direction of spatial
spillovers without differentiating traffic types (container, general non-containerized,
bulk).
5.0 CONCLUSION:-

The specific purpose of transportation is to fulfill a demand for mobility, since

transportation can only exists if it moves people, freight and information around,
otherwise it has no purpose. Any movement must thus consider its geographical
setting which in turn is linked to spatial flows and their patterns. Urbanization,
multinational corporations, the globalization of trade and the international division of
labour are all forces, shaping and taking advantage of transportation at different
levels. Consequently, the fundamental purpose of transport is geographic in nature,
because it facilitates movements between different locations. Transport thus plays a
role in the structure and organization of space and territories, which may vary
according to the level of development. In the 19th century, the purpose of the
emerging modern forms of transportation, mainly railways and maritime shipping,
was to expand coverage, and create and consolidate national markets.

In the 20th century, the objective shifted to prioritize transport modes, increasing
the capacity of existing networks and responding to the mobility needs and this at a
scale which was increasingly global. In the 21st century, transport networks focused
to cope with a globally oriented economic system in a timely and cost effective way,
and to do away with the problems of congestion and capacity constraints
environmental impacts. There is a trend in the expansion of merchant fleets with
bigger and bigger ships. These ships are in demand to achieve greater rates of return
per voyage. As ships get bigger in size, there are fewer ports that are capable of
offloading them. World commerce depends on hub ports; there are larger ships
offload their cargoes for further transshipment by smaller vessels. Globally, these hub
ports are very few in number; they require infrastructural assessments for activation.

Advancement in technology greatly improved the safety of the ships and crew.
Shipbuilding industry has made progress in terms of ship design, propulsion,
navigation, and habitability. Sea accidents are common due to poor seamanship and
human error. Advancement in ship- borne navigation equipment satellite
communication and shore based vessel monitoring and control, collision at sea is a
recurring phenomenon. Consequences of increased globalization and interdependence
have changed the maritime future of any region, including a more evident concern for
the security of shipping and seaborne trade. A move by China, Japan and Russia to
use their navies and coast guards to extend their regional influence are also the effect
of globalization. Investment in technologies is also considered as a possible option to
enhance navigational safety and protect the maritime environment.
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