IV.

Decision Criteria
In addressing the problem of the client, transportation management should be pushed
accordingly. This involves a wide variety of planning, execution and administrative capabilities
(Bowersox et al. 2014). Generally, the following are the criteria in evaluating the alternative
solutions based on transportation management.
a. Operational Management
Traffic departments one major responsibility is yard management and equipment
scheduling. In both common carrier and private transportation, scheduling is an important
process. In addition, proper yard management requires careful load planning, equipment
utilization and driver scheduling. Also preventive maintenance on equipment must be planned,
coordinated and monitored. Ideally, arrangement of delivery and pickup appointments are closely
related to scheduling. It is important to preschedule dock positions or slots to avoid extensive
waiting time and improve equipment utilization. The effective scheduling of equipment is key to
implementing time-based logistical arrangements. On the other hand, how load are planned
directly impacts transportation efficiency. Also, an important part of achieving transportation
efficiency is shipment routing. From the viewpoint of an administrative, it is the responsibility of
the traffic in assuring that routing is performed in an effective manner while meeting the
customer requirements.
b. Consolidation
Freight costs are directly related to size and of shipment and length of haul thereby places
a premium upon freight consolidation. The transportation savings in moving a consolidated
shipment versus multiple individual, small shipments were typically sufficient to pay for
necessary handling and local delivery while achieving significant total cost reduction. In
practical sense, consolidations should be planned prior to order processing and warehouse order
selection to avoid delay.
c. Negotiation
Obtaining the lowest possible rate consistent with service required is the responsibility of
the traffic management for any given shipment. Seeking win-win agreements wherein both

carriers and shippers share productivity gains is the key to effective negotiation. Hence, the
traffic management must seek the lowest rate consistent with service standards.

Alternative Solutions and SWOT Analysis

Upon recognizing the problems encountered by the client in transportation costs, the
following are the suggested alternative solutions that will respond accordingly to the problems
encountered. Along with these alternatives are its strengths, weaknesses, opportunities and
threats that will give a better picture of having these as alternatives.
a. A. LTL ( Less Than-Truckload) Shipment Carrier Selection and Rate Negotiation
LTL shipment involves less than 15,000 pounds that generally must be consolidated to
fully utilize trailer capacity. LTL carrier delivers goods from many different customers on one
truck and it also offers customers a more cost-effective method of shipping goods. Thus, there
should be a wise and strategic way of choosing carriers in terms of minimizing the fixed cost.
What carriers are candidate for selection in terms of cost minimization since LTL experiences a
higher percentage of fixed cost. In addition, rate negotiation must be considered in terms of
seeking the lowest rate consistent with service standards. Traffic managers must seek fair and
equitable rates in the context of building solid carrier relationships.

Strengths
Ideally, its strengths would revolve most likely on the effectiveness of cost-leadership. If
this alternative will be attained, savings will be a great opportunity for the firm to cover up the
costs associated in the transportation particularly on its fixed costs.
Weaknesses
Objectively, its weakness might rely on the quality of service that will be associated due
to the minimized cost. In an ideal world, transportation is really expensive. The firm might be
taken for granted if things would not be clear for both parties

Opportunities
The possible opportunities for this alternative is having a consistency of carrier in the
long run given that the transaction is on its regular basis. If negotiations are agreed well, mutual
improvements might be achieved.
Threats
Threats such as the inconsistency of performance and constraints such as environmental
factors (natural disasters) might affect or lessen the future improvements forecasted on this
alternative.
B. Enhancement of plant and warehouse network
Restructuring the positioning of plant and warehouse networks should be done to address
the problem. Investing on this alternative would be better if there will be configuration of
network of warehouses in a multiple yet appropriate geographic positioning. Instead of a single
geographic region, make it possible to have an ideal multiple geographic region.
Strengths
Effective logistical transportation could be the strength of this alternative. Given the fact
of adding the firms network of warehouses, transportation may improve in terms of distance,
time and cost. The added warehouses dealt with appropriate geographic positioning could also be
the strength of this alternative itself.
Weaknesses
However, the possible weakness of this alternative might be in terms of stock inventory.
A good inventory management should be properly implemented since there will be an additional
networks of warehouses. There should be a marginal quantity of stocks in responding to
malfunctions.
Opportunities
Primarily, shorter LTL shipping distances will be observed in this alternative. As a result,
cost advantage will take place. The shorter the LTL distance, the possible effect of reducing the
overall cost.

Threats
This would involve surplus of inventories in cases where the firm is consistent to its
100% fill rate. Surplus inventories would accumulate cost and given the fact that there will be an
additional warehouses, cost will be higher and would mean a loss for a firm.
C. Stock performance improvement
A good inventory management is having inventories or stocks which are appropriate or
enough to the demanded orders for shipment. Specifically, the inventory must have a marginal
quantity of stocks that would respond whenever malfunction arises. The inventories or stocks
must not be equal to what the demand is. This might cause some risks. Stock performance should
meant with the aforementioned.
Strengths
Good stock performance would increase the competitive advantage of the firm in terms
of fill rate. Lets say that the firm accomplishes 100% fill rate, the better feedback from the
customers will be received and it will turn as a strength on their part.
Weaknesses
On the other hand, good stock performance should be regulated in a way that it would not
increase its stock out frequency. Stock out might be the weakness of this alternative, if this will
not be regulated or controlled, it will degrade how well they are positioned to provide service
commitments in product availability.
Opportunities
This alternative will give a way for the firm to establish their competitive advantage in
terms of availability. In other words, their capacity to have stocks or inventories when desired by
a customer will be established through this alternative.
Threats
In contrast, the threat will be the consistency on its operation. If consistency will not be
regulated, customer expectations might be lessen and will create a disadvantage on their part.