Figure 1: Economic costs versus the time

Cost Drivers & Ways to Combat Them

Since goods are generally manufactured, stored and consumed at different locations, goods need to move from one link to another link in the chain for value add. The interactions between these players require investments, and these investments can be listed as economic costs, referenced in table 1 below.

Table 1: Economic costs drivers

As shown in figure 1, the economic costs related to transportation can be reduced by shifting the curve to the left by technological innovations. Few of them can be listed as:

Figure 2: Technological Innovations

The CGN Solution & Its Capabilities

Organizations can use these cost drivers and lead-time improvements to optimize their transportation, using the following framework. The transportation optimization framework can be divided into two categories as a strategic decision (where the organization must gauge market dynamics and its business plan, and decide on fleet sourcing, capacity planning based on available funds, and define constraints), and an operational decision (focused on implementation and the realization of results).

Figure 3: Framework for transportation optimization

CGN Global is a global consulting firm, in business for 24 years helping our partners solve strategic and tactical challenges in their global supply chains.  As advisors, our clients have trusted us with total business consulting to aid in mergers, acquisitions, integrations, including transportation optimization domain and have helped clients strategically and operationally realize top line and bottom-line impact (figure 4).

Figure 4: Sample results of CGN Global solution