Describe some of the strategies that firms can use to overcome the challenges related to transportation infrastructure congestion.
Transportation infrastructure congestion is a serious problem that many firms have to endure. Besides reducing efficiency, congestion causes an increase in the cost of production through extra costs incurred through delays and time wasted. It is therefore essential for any firm keen on maximizing profits to come up with adequate measure to address the problems of transport infrastructure congestion. A firm needs to set up a mechanism that will ensure that goods are delivered to customers in the shortest time possible, so that it develops confidence with its customers (Randolph 2003).
One main strategy that a firm should use is to ensure that the firm is strategically located in terms of its target market and transport infrastructure (Bowersox & Cooper, 2010). A firm, which is located near the target market, will have a significant advantage in that it will be quicker to reach the products into the market. Raw materials should also be delivered with ease to maintain a working production line. Concerning this, a firm needs to avoid congested locations like the large cities or places with extremely poor infrastructure. Since it is not easy for a firm to shift its location, firms should also opt to set up or rent warehousing facilities near their target market.
The means of transport that is adopted can significantly influence the efficiency of the transport system. There is therefore a need for firms to carry out research on the most efficient means of transport and further consider the cost implication. There is usually little or no congestion in some means of transport like air and railway transport. However, these in turn have their own disadvantages like cost and speed. Other means like sea transport are quite reliable but slow (May & Patterson, 2010). In choosing the mode of transport, the firm should consider other factors besides efficiency.
A firm needs to have a well-organised transport and logistics department that will synchronise its activities to the favourable time to transport. The department should make sure that deliveries are done in time and there is maximum utilisation of the available means of transport. This can include making sure that deliveries are done during the traffic off-peak hours, or when transport means are more favourable.
Inventory management can help to overcome serious problems in delays in transport. This is because it ensures that there is a steady supply of raw materials and also the goods are taken to the market in the shortest time possible. Inventory management would therefore help to solve the problem of need for urgent transport, which is prone to delays caused by hitches in transport. In addition, a firm needs to adopt a robust and efficient production system and procedures, based on efficient technologies, which will enable it to produce the goods quickly and efficiently. This will ensure that goods are produced in time and there will be no last-minute rush to deliver them to the client. Any last minute delivery attempt is prone to problems in transportation congestions. Congestion can also be eradicated through capacity expansion, capacity upgrades of the docks, and demand management through congestion pricing. When these strategies are put in place, productivity will ultimately be increased and few limiting factors can be easily tackled (Randolph 2003).
Bowersox, D.J., Closs, D.J. & Cooper, M.B. (2002). Supply chain logistics management. McGraw-Hill.
May, A.D. & Patterson N.S. (2010). Transport problems as perceived in the inner city firms. Transportation. 12 (3), 225-241.
Randolph W. H. (2003). Handbook of transportation science. New York:Springer Publishing.