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There are numerous advantages of road transport in comparison to other modes of transport:

Advantages:

Road transport required much less capital Investment as compared to other modes of transport such as railways and air transport. The cost of constructing, operating and maintaining roads is cheaper than that of the railways. Roads are generally constructed by the government and local authorities and only a small revenue is charged for the use of roads.

The outstanding advantage of road transport is that it provides door to door or warehouse to warehouse service. This reduces cartage, loading and unloading expenses.

3. Service in Rural Areas:

Road transport is most suited for carrying goods and people to and from rural areas which are not served by rail, water or air transport. Exchange of goods, between large towns and small villages is made possible only through road transport.

Road transport has a great advantage over other modes of transport for its flexible service, its routes and timings can be adjusted and changed to individual requirements without much inconvenience.

5. Suitable for Short Distance:

It is more economic and quicker for carrying goods and people over short distances. Delays in transit of goods on account of intermediate loading and handling are avoided. Goods can be loaded direct into a road vehicle and transported straight to their place of destination.

6. Lesser Risk of Damage in Transit:

As the intermediate loading and handling is avoided, there is lesser risk of damage, breakage etc. of the goods in transit. Thus, road transport is most suited for transporting delicate goods like chinaware and glassware, which are likely to be damaged in the process of loading and unloading.

7. Saving in Packing Cost:

As compared to other modes of transport, the process of packing in motor transport is less complicated. Goods transported by motor transport require less packing or no packing in several cases.

If the goods are to be sent immediately or quickly, motor transport is more suited than the railways or water transport. Water transport is very slow. Also much time is wasted in booking the goods and taking delivery of the goods in case of railway and water transport.

Road transport not only requires less initial capital investment, the cost of operation and maintenance is also comparatively less. Even if the rate charged by motor transport is a little higher than that by the railways, the actual effective cost of transporting goods by motor transport is less. The actual cost is less because the motor transport saves in packing costs and the expenses of intermediate loading, unloading and handling charges.

10. Private Owned Vehicles:

Another advantage of road transport is that big businessmen can afford to have their own motor vehicles and initiate their own road services to market their products without causing any delay.

11. Feeder to other Modes of Transport:

The movement of goods begins and ultimately ends by making use of roads. Road and motor transport act as a feeder to the other modes of transport such as railways, ships and airways.

In spite of various merits, road/motor has some serious limitations:

Motor transport is not as reliable as rail transport. During rainy or flood season, roads become unfit and unsafe for use.

2. Accidents and Breakdowns:

There are more chances of accidents and breakdowns in case of motor transport. Thus, motor transport is not as safe as rail transport.

3. Unsuitable for Long Distance and Bulky Traffic:

This mode of transport is unsuitable and costly for transporting cheap and bulky goods over long distances.

The speed of motor transport is comparatively slow and limited.

The road transport is comparatively less organised. More often, it is irregular and undependable. The rates charged for transportation are also unstable and unequal.

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Advantages and Disadvantages of Road Transport

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ADVERTISEMENTS: There are numerous advantages of road transport in comparison to other modes of transport: Advantages: 1. Less Capital Outlay: ADVERTISEMENTS: Road transport required much less capital Investment as compared to other modes of transport such as railways and air transport. The cost of constructing, operating and maintaining roads is cheaper than that of the ...

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Advantages and Disadvantages of Road Transport

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Advantages and Disadvantages of Road Transport

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Is Turkey still worth it for apparel companies?

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Turkey can be an attractive location for the manufacturing of apparel and textile goods. Companies doing business in Turkey must keep in mind that certain challenges present can come with political and monetary costs.

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Written by Andreea Moise on . Posted in Articles, Organisational performance

Placed at number #58 in the Forbes ranking of The World's Most Valuable Brands, there is no doubt that Zara came a long way from when it was founded in 1974, becoming one of the world's best known fashion brands and the flagship brand of the £2.5 billion holding group Inditex. But what's the secret behind Zara's meteoric ascension on the retail market?

A unique approach to supply chain management

The apparel industry is one of the most dynamic and fast changing industries where, with ever-changing trends, it is hard to predict market shifts or forecast the required supplies and raw materials.

While in the past the so called " push " strategy was associated with this industry, since most retailers were pushing new styles and outfits on the market, nowadays it has shifted to a more customer-centric approach. The major fashion brands have taken in the fact that in order to keep their competitive advantage, in an environment where there are new competitors at every corner, the importance of recognizing what a consumer wants and responding quickly, is crucial.

Moreover, when it comes to international brands, they also have to tackle the issue of geographic locations, different spending patterns and different demands that exist in every market.

So how does Zara do it? First off, it concentrated on speed. Over the past years Zara has perfected their " Fast Fashion " model, meaning that even though the average fashion retailers take 6 months to produce garments, Zara manages to do it in 3 weeks.

That is achieved by maintaining a strict control over their supply chain, and manages to fit the entire production process into a 10-to-15-day time frame. They use an impressive number of automated factories located in Spain, as well as a vast network of over 300 small finishing shops throughout Spain, North Africa and Turkey. The process starts in the factories that constantly create "grey goods", which then, as soon a new design is about to be launched, are sent to the finishing shops and turned into products ready to be shipped all over the world.

Basically Zara placed their bets on the impulses of trend-chasing shoppers, acquiring a regular clientele base that knows what it wants and when it wants something new, allowing the company to maximize their profits compared to other retailers in the industry.

The " Fast Fashion" system that Zara uses is heavily dependent on a constant exchange of information throughout every part of the supply chain. That is why, by avoiding unnecessary layers of bureaucracy, Zara has designed its organizational and operational procedures as well as their performance measures to enable the free flow of information. To add to this, other retailers such as IKEA or H&M have also concluded that fostering an open, integrative approach is key to maximizing results and profitability.

Inventory and centralized logistics

Inventory management and centralized logistics are also an important part of Zara's unique supply chain system. The speed at which raw materials are turned into clothing allows the company to ship more often and in small batches, limiting the distribution for every shop to the bare necessity. The quantity that should be delivered to each of the owned retail stores is determined by using inventory optimization models and while it helps avoiding the piling of unwanted stock, it also contributes to building the brand's exclusive image.

The pace that Zara has imposed goes even further than having an effective supply chain system. Sticking to a fast-paced predictable rhythm that's based around order fulfillment for their stores, everyone involved, from design to retail, knows the process and knows how their actions contribute to the outcome. As a result, this extends to Zara customers, who know exactly when to visit their stores for brand-new merchandise.

Zara has managed to implement a cross-functional operations strategy, along with its vertically-integrated supply chain that enables mass production under push control, leading to lower markdowns, higher profitability and value creation for shareholders in the short and long term.
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Tags: Organisational Performance, Supply Chain Performance

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Supply chain performance in the apparel industry - ZARA

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Written by Andreea Moise on . Posted in Articles, Organisational performance Placed at number #58 in the Forbes ranking of The World's Most Valuable Brands, there is no doubt that Zara came a long way from when it was founded in 1974, becoming one of the world's best known fashion brands and the flagship brand of the £2.5 billion holding group Inditex.

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Have you ever struggled with the question of when to buy factory direct and when to go through a vendor or trading company? Importers are often highly motivated to secure the lowest per-unit cost possible for the items they purchase from China. The old maxim of "cutting out the middleman" leads many buyers to reason that purchasing factory-direct is the only way to get the lowest cost of goods sold, and is thus the only smart option for buying from China.

This is not completely unsound logic, but like so often is the case this is not a hard-and-fast rule. In certain situations, there are advantages to dealing with other entities such as trading companies. Below we've outlined the pros and cons of buying factory direct.

The Pros

It should come as no surprise that working directly with your factory does provide some attractive advantages. These advantages include:

Direct Line of Communication
When you need to make modifications to your product, fast-track the production schedule, or need answers that can only be answered by someone on-site at the factory, you'll be thankful that you're working directly with your factory.

Response time is often critical in any manufacturing project, either domestically or overseas. If you have partnered with a reliable supplier, having direct access to their engineers and product design staff can mean huge reductions in lead time.

Attention to Detail
Except in rare cases when dealing with a truly huge factory, working directly with your supplier is a good indicator that your products receive the attention they deserve. It is likely that you will be assigned a factory contact who is directly responsible for the production line your products are being assembled on.

Buying agents and trading companies are by nature often ill-equipped to devote adequate attention to a single product. They deal with multiple factories producing an often dizzying array of products. This could mean that they are able to handle this level of production diversity with ease, but can be an equal indicator that things are falling through the cracks. It's important to consider the complexity of your order when deciding when to buy factory direct.
Lower costs
Its true - cutting out the middleman does mean you will often be able to secure a lower per-unit cost for your items. Working factory direct alleviates the need to finance the overhead costs of working with a trading company, such as commissions.

It's important to note that some of these savings will be consumed by incidental costs of manufacturing. Working factory direct means you will need to hire your own 3 rd party quality control firm as well as pay for freight forwarding and logistics support you'll need.

The Cons

There are some difficulties that are posed by working factory direct. Trading companies exist because they add value in the form of easing or eliminating many of these difficulties. The price premium they charge largely pays for these value-adding services.

2. Prepare for the Long-Haul

China law experts point out that nearly 90% of business cases filed in China actually go to trial. For this reason, it is important that any business that chooses to operate in China is prepared to participate in protracted litigation.

[sidebar name="case studies"]
Size Matters
Buyers seeking to work factory direct will often do well in finding some of higher-profile, more sophisticated factories themselves. Unfortunately buyers can find themselves hitting a brick wall at this point, when the big sophisticated factories are unwilling to do business will smaller importers.

Larger factories are interested in producing large orders, and making use of their economies of scale. It simply would not be profitable for them to devote their resources to producing small batch orders when those same resources can be put to use on bigger projects. For this reason, large factories will often refuse to work with small to medium sized enterprises, unless those buyers are willing to pay a premium.
Interest Level
Even though direct communication is listed above as a Pro of doing business directly with your factory, there are caveats. Assuming a large, sophisticated factory does accept a small order, that buyer will almost certainly receive very little attention from the factory.

The level of service you can expect from the factory is directly proportional to the chunk of the factory's total revenue your order represents. Having that direct line of communication will mean little when your calls and emails go unanswered.
Ease of Doing Business
Factories in China often do not have many English-speaking staff members, and even fewer who are well versed in western business practices. Buyers dealing factory direct may find themselves spending significant amount of time trying to overcome substantial language and cultural barriers.

If your quality standards, production schedules, and other relevant feedback is not fully understood by your supplier, you will likely end up highly dissatisfied with the products you receive.

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When To Buy Factory Direct And When Not To

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Have you ever struggled with the question of when to buy factory direct and when to go through a vendor or trading company? Importers are often highly motivated to secure the lowest per-unit cost possible for the items they purchase from China.

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The Pros and Cons of Goods Logistics | Edutrek

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EduTrek's college search engine contains extensive information on 7,845 colleges, schools and universities who offer 356,486 programs online and at 12,864 campuses nationwide. Start your college search at EduTrek.com.

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When a consumer purchases goods directly from the manufacture, it is referred to as buying factory direct, or making a direct buy. The factory direct option was facilitated in the 1990s by the development of e- commerce and through distribution of catalogs. Major factories, like Dell Computer, started marketing products directly to their market, rather than going through a traditional tiered sale system. Some consumers prefer to buy goods factory direct, as they tend to be less expensive.

Traditionally, a manufacturer makes items and sells them to a distributor. The distributor, in turn, sells the product to retailers. Each step in the chain increases the end cost of the item, and it also serves as insurance for the step before. For example, a factory can confidently invest a great deal of money in developing and manufacturing a product, because it knows that distributors will purchase it, allowing the factory to recoup its costs immediately. Likewise, a distributor sells to a retailer, covering their expenses, leaving the retailer to sell the product to consumers.

Some wholesale distributors skip the retailers, selling directly to consumers from their warehouses. This is known as wholesaling, and it can be an excellent way to get a good deal on products, if consumers are willing to visit wholesale warehouses and look for bargains. Most discount stores operate in this fashion, purchasing products from the manufacturer directly and offering them to consumers at a price which is cheaper than retail. Most of these businesses also have online storefronts, but actually visiting the warehouse is more likely to yield a deal, as the stock changes constantly.

When a consumer buys a product directly from a factory, it is assumed that it will be cheaper, because it has not traveled through the retail chain. This is not actually always the case. In the instance of a manufacturer which specializes in factory direct sales, the products will be held at a cheap and affordable price. But if the manufacturer also sells to distributors and retailers, the prices may be artificially inflated so that the manufacturer is not competing with the companies which retail the product. Some investigation should be undertaken before buying factory direct for this reason.

In many cases, consumers do not actually go to the site of the manufacturer to buy factory direct, but order it through phone, mail, or Internet catalogs instead. This means that the consumer has less control over the quality of the product, and it is advisable to understand the return policy on factory direct purchases before making them. Some manufacturers are amenable to returns on products which do not meet customer needs, while others do not accept returns, or will not offer full credit unless the merchandise is clearly damaged.

In other cases, a manufacturer will set up a storefront for factory direct sales. These outlet stores often feature surplus and older products, although they are in perfectly usable condition. Unlike a retail store, an outlet store will not necessarily stock a wide variety of colors, sizes, or designs, as the focus is on moving available merchandise, rather than creating an assortment of stock for consumers to choose from. As with mail ordering, consumers should take note of return policies.

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When a consumer purchases goods directly from the manufacture, it is referred to as buying factory direct, or making a direct buy. The factory direct option was facilitated in the 1990s by the development of e- commerce and through distribution of catalogs.