Logistics Global Logistics How Important

Logistics

Global Logistics

How important is intermodal transportation with respect to global logistics?

Intermodal transportation needs to be managed from a multidimensional perspective, with a focus on how to optimize overall supply chain performance from a constraint-based view. The most cost-effective and well orchestrated intermodal transpiration workflows and strategies globally seek to optimize the performance of carriage, motor and rail systems to their optimal advantage (Theodore, Anthony, 1998). The authors and researchers of the results shown in the peer-reviewed study Some propositions on intermodal transportation and logistics facility development: Shippers' perspectives (Theodore, Anthony, 1998) imply that the more well-defined and consistently operating a given mode of transportation the greater the stability of its pricing, performance and reliability. In effect the authors contend that the more commonly used and simplistic in process a given mode of transformation is, the further it travels down an experience curve, becoming more consistent in its daily operation.

The implications from a global logistics standpoint are significant. The study shows that only the most mature, replicable forms of intermodal logistics can scale to compensate for widespread differences in demand across regions and nations (Theodore, Anthony, 1998). The study concludes with the finding that despite how attractive customized intermodal transportation systems are, they are in effect orders of magnitude more expensive and difficult to manage despite their claims of high customization (Theodore, Anthony, 1998).

How do supply chains get more complicated when firms are doing business across borders vs. domestically?

When a firm is operating a supply chain domestically, the continual managing of suppliers to a relatively simple set of metrics is possible. When the supply chain crosses borders however, the level of analytics complexity rises exponentially, forcing firms to adopt a taxonomy of metrics to better manage the greater levels process and system integration (Hofman, 2004).

There are also the cultural constraints which can be very significant across borders, as evidenced by the Cultural Dimensions Model as defined by Dr. Geert Hofstede (Minkov, Hofstede, 2011). The five cultural dimensions he has defined have a direct impact on the overall performance of a supply chain at the communication and collaboration level. Managers given the task of creating a multinationally-based supply chain need to pay attention not only to supplier performance but also the cultural factors that can significantly impact their operations for years to come.