Using Collaborative Transportation Management in Global Supply Chain

Abstract

Due to escalating global competition and a decline in profit margins, most multinational corporations pursue global sourcing through a global supply chain (GSC) in order to secure market share and improve profits. The practice of e-commerce and the business trend of mass customization force both manufacturers and retailers to shorten cycle time by managing GSCs more effectively. Successful applications of GSCs, such as that by Dell Computer, have been widely discussed and publicized in the supply chain literature. However, the physical distribution of GSC execution is recognized as its weakest link and can result in inefficient and unreliable product delivery. The collaborative integration with global third party logistics (3PL) to execute physical distribution dictates the success of any GSC application. This article introduces an application of logistic collaboration, namely collaborative transportation management (CTM), which is a new business model that includes the carrier as a strategic partner for information sharing and collaboration in a supply chain.