Multimodal transport strategies in supply chain management can mitigate risks related to depending on just one mode.
Having a robust supply chain strategy will make businesses more resilient to supply-chain disruptions. There are two main forms of supply management issues: the first has to do with the supplier side, namely supplier selection, supplier relationship, supply planning, transportation and logistics. The second one deals with demand management issues. These are issues associated with product introduction, product line management, demand planning, product pricing and advertising preparation. Therefore, what typical techniques can companies use to enhance their capability to sustain their operations when a major interruption hits? In accordance with a recently available research, two methods are increasingly showing to work whenever a disruption happens. The initial one is known as a flexible supply base, while the second one is known as economic supply incentives. Although many in the industry would contend that sourcing from a single provider cuts expenses, it can cause problems as demand varies or when it comes to a disruption. Thus, depending on numerous vendors can offset the risk connected with sole sourcing. On the other hand, economic supply incentives work whenever buyer provides incentives to cause more vendors to enter the market. The buyer could have more flexibility this way by moving production among manufacturers, particularly in markets where there exists a limited amount of companies.
In supply chain management, disruption in just a route of a given transport mode can notably impact the whole supply chain and, often times, even bring it up to a halt. As such, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility within the mode of transport they depend on in a proactive way. For example, some businesses utilise a flexible logistics strategy that hinges on multiple modes of transport. They urge their logistic partners to diversify their mode of transport to include all modes: vehicles, trains, motorcycles, bicycles, ships as well as helicopters. Investing in multimodal transport methods such as for instance a combination of rail, road and maritime transportation and even considering various geographic entry points minimises the vulnerabilities and risks connected with depending on one mode.
To avoid taking on costs, different companies start thinking about alternate paths. For instance, as a result of long delays at major international ports in a few African states, some businesses encourage shippers to develop new channels in addition to traditional channels. This plan detects and utilises other lesser-used ports. As opposed to depending on just one major port, as soon as the shipping company notice heavy traffic, they redirect products to more effective ports over the coastline and then transport them inland via rail or road. According to maritime experts, this tactic has many benefits not just in relieving stress on overrun hubs, but in addition in the financial growth of appearing markets. Company leaders like AD Ports Group CEO may likely accept this view.