Carrier Managed Transportation in Supply Chain Management

Abstract

Logistics Transportation is an indispensable step that connects production, storage, and the final customers. Plenty of previous research has been done to achieve the goals such as low cost, high accuracy in timing, good customer service, and low damage rate, within the transportation system. However, most of those improvements are on the operational level. There are few supply chain collaborations that try to optimize logistics transportation from a strategic level.

This thesis proposes a new collaboration policy, Carrier Managed Transportation (CMT). It is a coordinated relationship between the carrier and the clients in a supply chain. As opposed to the traditional approach, where the client decides when to request shipments of the products, in CMT, the carrier will make these decisions on their behalf through information sharing.

Due to the complexity in relationships and responsibilities of chain members, we divide the business scenarios into four cases and discuss the impact of CMT on each case. Comparisons and numerical examples across cases are also provided, along with some conclusions regarding the implementation of CMT.