Assignment Instructions
Answer the following two questions.
Question 1. Why is the transportation industry cyclical in nature?
Question 2. In terms of capacity, what steps can transportation companies take to avoid or at least mitigate the negative effects of economic downturns like this most recent one?
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Running Head: Cyclical transportation1 Cyclical transportation4 A Cyclical Transportation Industry NAME TLMT 352 American Public University Professor Magee Month Day, Year A Cyclical Transportation Industry Why is our transportation industry cyclical in nature? In terms of capacity, what steps can be taken to avoid or mitigate the negative effects of economic downturns in transportation companies? An industry that is cyclical in nature is one that follows a business cycle, and its performance is based off the economy in general. The transportation industry is cyclical when the economy is in growth and booming and the products and services are moved through transportation. During the recent economic downturn, businesses cut out unnecessary expenses to ensure there was enough cash in reserve to boost the transportation industry to ease or help stop the depression in the economy. The difficulties in the transportation with cutting down the capacities to shop people, material, completed products can make it difficult to cut the losses in an economic downturn. Our federal government has an obligation during these downturns to alleviate taxes on the industry through exemptions so the industry can keep up with other areas in cost cutting. In the most recent economic downturn of " the great recession which lasted from December 2007 till June 2009, was caused by an 8 Trillion dollar housing bubble burst" (Economic Policy Institute, n.d.). With the economic downturn, job loss had increased exponentially and with that job loss consumerism dropped, this helped decrease the need for the transportation industry to import goods and deliver the services. Putting the downturn in perspective, Pento states "cascading Shanghai equity prices (down 40 percent since June 2014) and plummeting rail freight volumes (down 10.5 percent year over year), all clearly illustrate that China is not growing at the promulgated 7 percent, but rather isn't growing at all" (2016). This slump in transportation and trade has devastated our transportation industry. Our supply chain services are used by companies that offer 3PL such as UPS, FedEx, and DHL. These 3PLs offer an intermodal transportation service, but companies are beginning to outsource their part of transportation needs to take stock in tax loopholes that ensure they are able to cut costs in their transportation needs. In the end, our industry of transportation is cyclical because the ebbs and flows of the economy, effects our economic growth and development here and abroad. This growth plays into the needs of the consumer and as such those needs increase the use of transportation to move the products from beginning to end. With federal government help on tax exemptions or tax breaks, our transportation industry will bounce back with a surge. Thinking outside the box and increasing movement around the globe will give an upturn in the industry. Reference Pento, M. ( 15 Jan 2016). US Markets. A recession worse than 2008 is coming. Retrieved from: http://www.cnbc.com/2016/01/15/a-recession-worse-than-2008-is-coming-commentary.html Rodrigue, Jean-Paul Dr., and Notteboom, Theo Dr. (2013). “Intermodal Transportation and Containerization”. The Geography of Transport Systems. New York: Routledge. ISBN 978-0-415-82254-1. Retrieved from: https://people.hofstra.edu/geotrans/eng/ch7en/conc7en/ch7c1en.html Economic Policy Institute. (n.d.). The State of Working America. The Great Recession. Retrieved from: http://stateofworkingamerica.org/great-recession/ someTitle IMPORTANCE OF INFORMATION Information and communication technology (ICT) enables the collec- tion, analysis and evaluation of data and the transfer of information from one point to another. Information flows in warehouses and supply chains are as fundamental as the physical flows of goods and materials. Such information flows occur not only internally in companies, but also between external suppliers, contractors and customers. Consequently all the physical goods, people and material flows are triggered and paralleled by ICT. The whole warehouse and supply chain process is kept moving by communication and the supply of information. The timing and quality of the information enables decision-making. Good information enables good decisions to be made. The opposite is also true and all parts of supply chains rely on ICT for planning, organising, operation and administration together with all the other management processes involved. When using any form of e-based com- munication, this will also include the customer interface. Information flows not only from top to bottom but also internally and externally. For example, a warehouse order picker uses a pick list, which is generated from the (external) customer order. These picking opera- tions, in turn, are part of decisions taken at the tactical warehouse plan- ning level and the tactical inventory planning level. The information required by anyone at any level is therefore connected and is part of a complex set of data handling and communication. ICT will facilitate all 6 Warehouse Information Communication Technology Emmett, Stuart. Excellence in Warehouse Management : How to Minimise Costs and Maximise Value, Wiley, 2005. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=239041. Created from apus on 2018-03-28 18:56:17. C op yr ig ht © 2 00 5. W ile y. A ll rig ht s re se rv ed . these fundamental triggering, coordinating and controlling functions throughout the supply chain, including the warehouse. The introduction of XML (extensible markup language), which serves as protocol for data transfer between computers, enables more flexible and easier transfers and improves upon electronic data interchanges (EDI) methodology as it works over the internet and does not need dedicated networks. It can therefore open up the electronic world to smaller companies as the fol- lowing benefits of web-visibility indicate: • Real-time access to data for customer: – Incorporates status updates that have been received just seconds earlier – Gives users real-time access to information about multi-party events for informed business decisions – Customised report creation – Exception alerts that automatically notifies users of changes, problems, etc. – Monitors milestones like early/late arrival – Lets users find shipments and view associated status via their own information, such as PO number, sales order or waybill – Enables tracking and tracing and accommodates user’s existing busi- ness process and info systems – Can be branded with logos, terminology, etc., as user organisation’s own value-added visibility service. • Supports selective data sharing with specified trading partners. • Facilitates smoother inter-enterprise operations and supply chain management. • Expanded service coverage (longer hours, wider area). • Flexible communication methods. • Expanded customer base: – access to new markets that requires web-visibility functionality – differentiation in a price-driven market. • Enhanced company image and brand. • Automation of operations such as shipment tracking. • Automation of transactions such as order processing. • Increased overall transactional and operational efficiency. W A R E H O U S E I C T 129 Emmett, Stuart. Excellence in Warehouse Management : How to Minimise Costs and Maximise Value, Wiley, 2005. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=239041. Created from apus on 2018-03-28 18:56:17. C op yr ig ht © 2 00 5. W ile y. A ll rig ht s re se rv ed . • Increased profit margin on services via value added proposition. • Reduced transaction and customer service costs. The following case study illustrates many of the benefits of ICT for distribution operations. CASE STUDY 6.1: REED BOARDALL – FROZEN AND CHILLED FOODS DISTRIBUTION – ICT Logistics requirements of frozen and chilled food distribution do not stop at getting products at the right place and the right time. They must get there at the right temperature and with the right paperwork and often with shorter lead times. At its distribution centre at Boroughbridge, North Yorkshire, Reed Boardall has over 4000SKUs of frozen and chilled foods con- solidated for onward deliveries to the entire main supermarket regional distribution centres in the UK. The company is the only single site consolidator for the ‘big six’ supermarkets. More than 1.5 million pallets are handled each year with a market value in excess of £1 billion.The company processes 260000 orders a year.The challenge for its supply chain is to handle shorter pro- duction runs, achieve lower stocks with both manufacturers and retailers and provide shorter lead times – order to despatch – late day one for early day two. With these kinds of figures and the challenges of cold distribu- tion, Reed Boardall has looked to new technology to provide some interesting solutions. IT controls all in-store and traffic operations; orders are received on-line from customers and retailers via EDI 24 hours a day, seven days a week and customers can access live, on-line their stocks and movements. Reed Boardall operates a fleet comprising 140 vehicles,all of which are under three years old and use a communication system and on- board temperature monitors with radio frequency download. In addition to building the Boroughbridge NDC, other weapons in the company’s strategy to meet its challenges include the devel- opment of a shared user network to achieve lower cost base; the 130 E X C E L L E N C E I N W A R E H O U S E M A N A G E M E N T Emmett, Stuart. Excellence in Warehouse Management : How to Minimise Costs and Maximise Value, Wiley, 2005. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=239041. Created from apus on 2018-03-28 18:56:17. C op yr ig ht © 2 00 5. W ile y. A ll rig ht s re se rv ed . provision of greater on-line links with the supplier and retailer and cooperating in partnership with retailers to facilitate faster stock- replenishment. The technological advances the company has adopted include on- line order receipt and progress; live order fulfilment reports; live stock information available to supplier and retailer and on-line com- plete product traceability with audit trail. Further technological developments for the future include a live load and trace system; increased capacity and versatility of reefer trailers and extending the use of radio frequency identification (RFID) from the tractors and trailers to the products – utilising the system for units that can be returned.The Reed Boardall manage- ment are very much interested in this system.The company, which has been operating a paper-based system, does not operate bar code-based data capture systems believing them to be almost passé and are keenly awaiting the time when RFID prices come down to the 5–10 pence range rather than 35 pence they are now. The pick lists, clipboards and pencils have now been put away and replaced by the other significant technological development, as Reed Boardall has automated its picking team by adopting a speech recog- nition system for pick to voice. The system is a real-time data interchange with the company’s stock system. ‘Human dialogue is the easiest and most productive way to keep hands free,’ explains