Question

What has been the financial impact of the transportation industry at an industrial and organizational level?

Answer 1

The financial impact of the transportation and logistics industry as an industrial and organizational level is in cutting costs and making the processes becoming more cost efficient through the below four factors:

1. Logistics models: The companies who are engaged in transportation solutions extensively use the logistics models and techniques like PERT, Critical path method (CPM) to save a lot of unnecessary costs to their clients. They make use of supply-demand capacity channels and try to cater all of their strategic business units (SBUs). This helps in making a process more robust and a good business relationship.

2. ERP Based implementation: The Enterprise resource planning (ERP) based solution also helps the transportation solutions companies to come out with efficient ways to cater to their customers and save on their yearly costs. This is an expensive software solution which is offered by SAP company but is very efficient in providing the solution to the day to day process needs and better control. This leads to better cost handling and savings on the company’s part.

3. Better Forecasts: The transportation solution providers are able to make better multiple forecasts (short term) in order to suggest to their client about the demand-supply pattern aligned to their transportation capacity. This leads to better control and fewer resource wastages, which in turn, leads to cost savings.

4. Outsourcing: Many companies today are focusing on outsourcing their transportation needs through the companies who specialize in logistical control and its implementation. This leads to the elimination of the logistics department from the organizational structure and can lead to lay off of the employees too. From company’s perspective, it will save a lot of costs and the company can focus on its core competency.