Backhauling in supply chain management

  

Date Posted: 8/31/2012 6:16:37 AM

Posted By: moff J  Membership Level: Silver  Total Points: 485

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The success of many companies is dependent to a large extent on the effectiveness of its supply chain. This is analyzed in two variables of efficiency and responsiveness.
Efficiency encompasses factors such as timeliness, reliability, quality and minimum cost implications.
Responsiveness is with respect to changes in the internal organization environment and the external environment. A good supply chain ought to be responsive in order to be able to benefit the entity and be used as a competitive advantage tool.

One of the critical elements of a supply chain is transportation. This delivers time utility to the goods and ensures that they are available for consumption by the customers as and when they are needed.

However, transportation has one major pertinent issue which is referred to as empty back hauling.
This is used to describe the situation when a truck transports cargo from one place to another only to return on an empty truck. This is costly to an organization and increases the cost of doing business.
Take an example of a cement truck which leaves Bamburi Cement factory in Mombasa en route to Nakuru to deliver cement supplies. Once it has delivered the commodity the truck has to go back to its destination. If there is nothing to be carried from Nakuru to Mombasa, the truck will go back empty and consume as much fuel as it might have used when it was delivering the cement. This is what is called empty back hauling.

To manage this, companies have to build collaborations with other entities. For instance, if the truck gets agricultural produce to transport to Mombasa, it will have saved on costs for the parties involved.
Therefore, in order to create efficient supply chains based on the above issue, an organization must obtain ways of avoiding the empty back hauling problem which might be

costly to the organization.

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