Multimodal transport methods in supply chain management can mitigate risks related to counting on just one mode.
In order to avoid incurring costs, different businesses give consideration to alternative roads. As an example, because of long delays at major international ports in certain African countries, some companies recommend to shippers to develop new routes as well as conventional paths. This plan identifies and utilises other lesser-used ports. Rather than depending on an individual major commercial port, once the shipping business notice heavy traffic, they redirect products to more efficient ports over the coast then transport them inland via rail or road. According to maritime experts, this plan has many advantages not only in alleviating stress on overwhelmed hubs, but in addition in the economic growth of emerging economies. Business leaders like AD Ports Group CEO would likely accept this view.
Having a robust supply chain strategy will make companies more resilient to supply-chain disruptions. There are two main kinds of supply management problems: the very first has to do with the supplier side, specifically supplier selection, supplier relationship, supply preparation, transportation and logistics. The second one deals with demand management problems. They are issues regarding product launch, product line management, demand preparation, item pricing and promotion preparation. Therefore, what typical strategies can companies adopt to boost their capability to sustain their operations whenever a major interruption hits? In accordance with a recent study, two techniques are increasingly demonstrating to work when a disruption occurs. The first one is called a flexible supply base, while the second one is named economic supply incentives. Although some in the industry would argue that sourcing from a single supplier cuts costs, it can cause issues as demand varies or when it comes to an interruption. Hence, depending on numerous manufacturers can decrease the risk associated with sole sourcing. On the other hand, economic supply incentives work when the buyer provides incentives to induce more vendors to enter the market. The buyer will have more flexibility this way by shifting manufacturing among manufacturers, specially in areas where there exists a small number of vendors.
In supply chain management, disruption within a path of a given transport mode can somewhat influence the whole supply chain and, in certain cases, even take it to a halt. As such, company leaders like P&O Ferries CEO and Maersk CEO work hard to add flexibility into the mode of transport they depend on in a proactive way. As an example, some businesses utilise a flexible logistics strategy that relies on numerous modes of transport. They urge their logistic partners to mix up their mode of transport to incorporate all modes: trucks, trains, motorcycles, bicycles, vessels as well as helicopters. Investing in multimodal transportation practices including a mixture of rail, road and maritime transportation as well as considering various geographic entry points minimises the vulnerabilities and dangers related to depending on one mode.