Core concepts of SCM?

SUPPLY CHAIN MANAGEMENT In commerce, supply chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply chain. Supply-chain management has been defined as the "design, planning, execution, control, and monitoring of supply-chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.” For more explanation visit: https://www.youtube.com/watch?v=Mi1QBxVjZAw LOGISTICS Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items. The logistics of physical items usually involves the integration of information flow, materials handling, production, packaging, inventory, transportation, warehousing, and often security. For more explanation visit: https://www.youtube.com/watch?v=Vu3o2-3uSKE CORE CONCEPTS OF SCM Shortly after your alarm clock goes off and the coffee maker kicks on, the aroma of your favorite coffee fills the air. The supply chain is responsible for getting those coffee beans across the world and to your kitchen. Something so common in every household, takes a great deal of planning, demand forecasting, procurement, and logistical expertise to move those beans to local sellers while still fresh. Without a strong supply chain in place, your caffeine-fix options would be severely limited. SCM involves a series of key activities and processes that must be completed in an efficient (fuel-conserving, cost-reducing, etc.) and timely manner. Otherwise, product will not be available when needed by consumers like you. The Seven Rights of Fulfillment The ability to meet customer requirements, for everything from coffee beans to Crocs, is built upon the expectation that everything is done correctly in the supply chain. And that means doing it right the first time – no mulligans, no mistakes are allowed. In the quest to provide quality service and satisfy customers, world-class companies along the supply chain are guided by the Seven Rights of Fulfillment. If you think about it, every order needs to be executed according to these seven goals. You must attempt to deliver a “perfect order” to every customer every time. Doing it right the first time makes the customer happy, saves the cost of fixing errors, and doesn't require extra use of assets. Thus, every part of the organization has a vested interest in pursuing perfection. A “perfect order” delivery is only attained when all Seven Rights of Fulfillment are achieved. To accomplish a perfect order fulfillment, the seller has to have your preferred product available for order, process your order correctly, ship the entire order via the means that you request, provide you with an advanced shipping notification and tracking number, deliver the complete order on time and without damage, and bill you correctly. A seller’s ultimate goal is to make the customer happy by doing the job right, which gives them a good reason to use the seller’s services again in the future. SCM Flows If the goal of SCM is to provide high product availability through efficient and timely fulfillment of customer demand, then how is the goal accomplished? Obviously, you need effective flows of products from the point of origin to the point of consumption. But there’s more to it. Consider the diagram of the fresh food supply chain. A two-way flow of information and data between the supply chain participants creates visibility of demand and fast detection of problems. Both are needed by supply chain managers to make good decisions regarding what to buy, make, and move. Other flows are also important. In their roles as suppliers, companies have a vested interest in financial flows; suppliers want to get paid for their products and services as soon as possible and with minimal hassle. Sometimes, it is also necessary to move products back through the supply chain for returns, repairs, recycling, or disposal. Because of all the processes that have to take place at different types of participating companies, each company needs supply chain managers to help improve their flows of product, information, and money. This opens the door of opportunity to you to to a wide variety of SCM career options for you! SCM Processes Supply chain activities aren't the responsibility of one person or one company. Multiple people need to be actively involved in a number of different processes to make it work. It's kind of like baseball. While all the participants are called baseball players, they don't do whatever they want. Each person has a role – pitcher, catcher, shortstop, etc. – and must perform well at their assigned duties – fielding, throwing, and/or hitting – for the team to be successful. Of course, these players need to work well together. A hit-and-run play will only be successful if the base runner gets the signal and takes off running, while the batter makes solid contact with the ball. The team also needs a manager to develop a game plan, put people in the right positions, and monitor success. Winning the SCM “game” requires supply chain professionals to play similar roles. Each supply chain player must understand his or her role, develop winning strategies, and collaborate with their supply chain teammates. By doing so, the SCM team can flawlessly execute the following processes: • Planning – the plan process seeks to create effective long- and short-range supply chain strategies. From the design of the supply chain network to the prediction of customer demand, supply chain leaders need to develop integrated supply chain strategies. Broadly, the typical sales and operations planning steps are: 1. Define Your Plan using demand planning and statistical forecasting generate a demand plan aligned with seasonality & product life cycle trends. 2. Agree on an Inventory Strategy to achieve desired service levels by defining statistical safety stocks and reorder point replenishment models. 3. Optimize Supply by rebalancing inventory across sites to resolve supply gaps. 4. Manage Your Constraints to ensure that there is enough capacity to fulfill demand increases and balance worker capacity with material levels 5. Make Decisions by evaluating financial trade-offs to maximize revenue and optimize inventory • Procurement – the buy process focuses on the purchase of required raw materials, components, and goods. As a consumer, you're pretty familiar with buying stuff! Procurement is just one of the many roles involved in a good supply chain. It should be considered a core component of a company’s corporate strategy. Proper procurement management is vital because an organization can end up spending over half of its revenue on purchasing goods and services. Procurement makes a huge difference between the success and failure of a business. The procurement process includes the following steps: 1. Identifying requirements 2. Approving the request for purchase 3. Finding suppliers 4. Making inquiries and receiving quotations 5. Negotiating the terms 6. Making a final selection of the vendor 7. Creating a purchase order and goods receipt 8. Shipping management 9. Receiving invoices and making payments • Production – the make process involves the manufacture, conversion, or assembly of materials into finished goods or parts for other products. Supply chain managers provide production support and ensure that key materials are available when needed. Production has following planning steps: 1. Sales Forecasting 2. Sales and Operations 3. Demand Management 4. Detailed Scheduling 5. Production: 6. Material Requirements Planning 7. Distribution – the move process manages the logistical flow of goods across the supply chain. Transportation companies, third party logistics firms, and others ensure that goods are flowing quickly and safely toward the point of demand. It is an overarching term that refers to numerous activities and processes such as packaging, inventory, warehousing, supply chain, and logistics. 8. Customer Interface – the demand process revolves around all the issues that are related to planning customer interactions, satisfying their needs, and fulfilling orders perfectly.

Demand Management?

Demand management is a planning methodology used to forecast, plan for and manage the demand for products and services. This can be at macro-levels as in economics and at micro-levels within individual organizations. For example, at macro-levels, a government may influence interest rates in order to regulate financial demand. At the micro-level, a cellular service provider may provide free night and weekend use in order to reduce demand during peak hours.

Supplier Relationship Management?

Supplier relationship management (SRM) is the discipline of strategic planning for, and managing, all interactions with third party organizations that supply goods and/or services to an organization in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value and reduce risk of failure. Supply chain management (SCM), the management of the flow of goods and services, involves the movement and storage of raw materials, work-in-process inventory, and of finished goods from point of origin to point of consumption. Interconnected, interrelated or interlinked networks, channels and node businesses combine in the provision of products and services required by end customers in a supply the chain.

Sourcing & Purchasing?

Sourcing describes all those activities within the procurement process concerning identifying and evaluating potential suppliers, engaging with selected suppliers and selecting the best value supplier.The outcome of the sourcing process is usually a contract or arrangement that defines what is to be procured, on what terms and from which suppliers. Purchasing refers to the portion of the procurement cycle that is actively engaged in buying a product or service from a supplier. Think of purchasing as the transactional portion of procurement. If procurement is the subject, then purchasing is the verb. Tasks that directly relate to the process of how goods and services are ordered are purchased while activities such as strategic sourcing and vendor contract negotiation constitute procurement.

Quality Management?

Quality Management, the six Total Quality Management factors that are related to supply chain performance are leadership, strategic planning, human resources management, supplier quality management, customer focus, and process management.Strategic Supply Management initiatives include: Reducing supply bases and establishing closer relationships with their suppliers, Buyers are working closely with suppliers and potentially launching joint strategic projects, Earlier supplier involvement and joint problem-solving efforts, leading to the early discovery of quality problems ,Inter-firm production scheduling breaks down barriers between organizations, resulting in shorter production runs, and developing a favorable quality culture based upon top-management commitment to improving beyond organizational boundaries.

Introduction to Logistics Management?

Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination. Logistics management helps companies reduce expenses and enhance customer service. The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination. By adhering to customer needs and industry standards, logistics management facilitates process strategy, planning and implementation.

Transportation?

Transportation is defined as the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transportation is important since it enables trade between people, which in turn establishes civilizations. I find it an interesting point that transportation is an enabler of civilization, but this makes sense, as it enables the ability to trade and communicate.

Reverse Logistics?

Reverse logistics ae the set of activities that is conducted after the sale of a product to recapture value and end the product's lifecycle. It typically involves returning a product to the manufacturer or distributor or forwarding it on for servicing, refurbishment or recycling. Reverse logistics are sometimes called aftermarket supply chain, aftermarket logistics or retrogistics. The aftermarket processes that a product can undergo in reverse logistics are numerous and include: Remanufacturing, Refurbishment, Servicing, Returns Management, Recycling, Waste Management, Warranty Management, Warehouse Management.

Cold Chain?

The term cold chain or cool chain denotes the series of actions and equipment applied to maintain a product within a specified low-temperature range from harvest/production to consumption. A cold chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of refrigerated production, storage and distribution activities, along with associated equipment and logistics, which maintain a desired low-temperature range.

Inventory Management?

Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The concept of inventory, stock or work-in-process has been extended from manufacturing systems to service businesses and projects, by generalizing the definition to be "all work within the process of production- all work that is or has occurred prior to the completion of production".

Introduction to Warehouse?

A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, towns or villages. They usually have loading docks to load and unload goods from trucks. Sometimes warehouses are designed for the loading and unloading of goods directly from railways, airports, or seaports. They often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

Warehouse Process?

The six fundamental warehouse processes . Optimizing these six processes will allow you to streamline your warehouse operation, reduce cost & errors, and achieve a higher perfect order rate. They are : 1. Receiving 2. Put-Away 3. Storage 4. Picking 5. Packing 6. Shipping

Warehouse VAS?

A value-added service (VAS) is a popular telecommunications industry term for non-core services, or, in short, all services beyond standard voice calls and fax transmissions. However, it can be used in any service industry, for services available at little or no cost, to promote their primary business. In the telecommunications industry, on a conceptual level, value-added services add value to the standard service offering, spurring subscribers to use their phone more and allowing the operator to drive up their ARPU. For mobile phones, technologies like SMS, MMS and data access were historically usually considered value-added services, but in recent years SMS, MMS and data access have more and more become core services, and VAS therefore has begun to exclude those services.

MHE, Safety & Security?

Material handling equipment (MHE) is mechanical equipment used for the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal.The different types of handling equipment can be classified into four major categories:transport , positioning , unit load formation , and storage . MANAGING WAREHOUSE SAFETY AND SECURITY There are many warehouse management procedures you can adopt today to better cultivate industry-leading safety and security. They are : Risk Assessments, Electric and hydraulic safety circuits within machine, Safety fencing and zoning ,Additional warehouse safety guarding.

E-Commerce?

E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce is in turn driven by the technological advances of the semiconductor industry, and is the largest sector of the electronics industry.

ERP & TMS?

Enterprise resource planning refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. A complete ERP suite also includes enterprise performance management, software that helps plan, budget, predict, and report on an organization’s financial results. A transportation management system is a subset of supply chain management concerning  transportation operations and may be part of an enterprise resource planning system. A TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions.

VMI?

Vendor Managed Inventory (VMI) and Collaborative Replenishment is a proven approach to streamlining inventory management and order fulfillment that improves collaboration between suppliers and their distribution partners by aligning business objectives and optimizing operations for all participants. You may be asking, what is the difference between VMI and Collaborative Replenishment. It’s simple, Collaborative Replenishment is an evolution of VMI that includes trading partners working together to ensure an efficient inventory management program. It goes far beyond the capabilities of what traditional VMI is thought of including things like truck building, available to promise and more. It offers companies more choices by enabling orders to be launched by any trading partner, offering multiple routes to market, and utilizing various types of demand signals. In all, collaborative replenishment is a more flexible approach to supply chain management, but at is core Collaborative Replenishment includes VMI and all its benefits.

VISIT?

As part of the Warehousing module on both the Logistics and Supply Chain Management MSc and the Procurement and Supply Chain Management MSc programmes, students have the opportunity to visit a choice of warehouses in the local Milton Keynes area. By visiting the warehouses, students are able to experience the processes and operations within a warehouse first hand and see the practical application of knowledge and skills developed on the course.
Transportation

TRANSPORTATION

What is Transportation and Logistics Management?

According to Wikipedia, transportation is defined as the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline and space. The field can be divided into infrastructure, vehicles and operations. Transportation is important since it enables trade between people, which in turn establishes civilizations. I find it an interesting point that transportation is an enabler of civilization, but this makes sense, as it enables the ability to trade and communicate.

According to the APICS dictionary, logistics is defined as 1) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities. 2) In a military sense (where it has greater usage), its meaning can also include the movement of personnel.

The Council of Supply Chain Management Professionals (CSCMP) defines logistics as the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound freight management, outbound, internal, and external movements.

After Asking “What is Transportation and Logistics Management?” Do you Think They are the Same Thing? 

If you have read the above academic definitions, you will see that that after Asking “What is Transportation and Logistics Management” it seems rather easy to see the difference between the two.

Transportation is the driver of logistics, but logistics is the race car driver in the seat of transportation. In fact, it’s easy to see from that sentence alone, the pure difference. Logistics requires planning, transportation is just the mode to execute the planning, when getting freight from point A to point B. Clearly, they are not the same thing, but transportation is just simply a part of logistics. When it comes to logistics, logistics executives must make further decisions beyond the mode of transportation to include:

  • Packaging
  • Containerization
  • Documentation
  • Insurance
  • Storage
  • Importing and Exporting Regulations
  • Freight Claims Management
  • Choosing the correct LTL freight classLTL freight class for your shipment
  • Working & collaborating with other executives within the supply chain
  • Managing vendors and partners
  • Responsible for mitigating risk and mitigating expenditures

This is another reason it is vital within the logistics departments of both small and large businesses, that executives don’t see software, such as transportation management system software, as the end all be all of logistics management. TMS software is helpful, but as you can see, beyond transportation procurement and management via software, there are many things a logistics executive faces.

Often, outsourcing logistics to an expert provider, who can not only offer software, such as a transportation management system, but also integrated services to deal with accounting, claims, and building custom inbound freight programs will allow logistics executives to have more meaningful collaborations with others in the supply chain and company at large.

Importance of Transportation in Logistics Management

While it is much easier to connect companies and customers by means of e-commerce transactions and the Internet, still physical delivery relies on effective management of a transportation system. On average, transportation operation costs constitute 30% of logistics costs. Thus, the role of transportation in logistics systems is crucial. There is an apparent interconnectedness between transportation and logistics while performance of logistic activities is impossible without transportation management. Vice versa, proper logistics system enahcnes traffic environment and transportation development (Thompson and Taniguchi, 2001).

As such, the notion of supply chain management assumes planning and managing all logistics, sourcing, procurement, and conversion operations. Supply chain managers coordinate their actions and collaborate with channel partners, including intermediaries, suppliers, third-party service providers, and customers. In addition, the practice of supply chain management integrates supply-and-demand management among various companies. Thus, supply chain management assumes management of business relationships among a main company and all its outside supply chain partners (Krumwiede and Sheu, 2002).

Cost efficient and effective logistics management requires the establishment of an economical and responsive transportation network. It enables a company to reduce costs, implement strategic changes and advance customer service levels without disrupting an overall supply chain flow. End-to-end network visibility is an initial step in setting up a responsive transportation network. The point is that visibility enables companies to centralize their production operations to lower-cost areas without affecting customer service levels. Visibility enables transparent monitoring and appropriate management of all the uncertainties within the network and keeping inventory levels low. A primary task in setting up an economical transportation network is realizing an essential role of transportation. Rather than taking this component as a source of cost and risk, logistics managers should treat it as the largest component of the cost structure of within the entire logistics structure. According to Chang (1998), transport accounts for about 30% of the total spending on logistics operations, which equals to the amount of inventory and warehousing altogether.

 

 

 

 

 

 

 

 

 

 

 

 

TYPES OF TRANSPORTATION

These most common five modes of transport are: railways, roadways, airways, waterways and pipelines. Following is the brief account of each mode with reference to Indian conditions with relative merits and demerits.

I. Railways:

Indian railway system has grown into Asia’s largest and the world’s fourth largest. It has route length of 72,000 kilo meters by the end of 1990. The daily run is 15,000 kilo meters with running of 12,000 trains carrying 7 lakh tons of goods. The average cost per ton kilo meter is 27 paise.

Evaluation:

Merits:

  1. Large carrying capacity:

Compared to other means of transport, railways are known for bulk carriage of goods over long distances.

  1. It is economical:

As the freight rates are telescopic and referential, it works cheaper particularly in case of heavy goods over long distances.

  1. It is all weather modes:

Railways provide all season protection to the products moved on uninterrupted basis.

  1. It has containerisation:

Indian railways have done a good job by containerising on major routes facilitating safe, uninterrupted and speedier movement of goods.

  1. It links international markets:

Railways are the main sources of connections with the markets outside the country moving goods from interior parts to the points of overseas supply and shipping.

Demerits:

  1. Costlier over short distances:

Railway transport works costlier over short distances because of tapering and differential tariff rates.

  1. Slower movement:

As compared to road and air transport, the speed of movement is slower.

  1. Inordinate delays:

In India we have three types of lines as broad, meter and narrow gauge resulting in frequent transhipments; again shortage of wagons and, therefore, space forces the business community to tolerate inordinate delays.

II. Roadways:

Indian road network is one of the largest in the world. It has a total road length of 18 lakh kilo meters of which 50 percent is surfaced. Of this, national highways account for 35,000 kilometers account for the 50 percent of total traffic. On this road length, 9 lakh vehicles ply carrying goods.

 

 

Evaluation:

Merits:

  1. Economical over short distances:

As compared railways, it is more economical. The studies have proved that it is cheaper by 25 percent.

  1. Speedier movement:

Road transport is speedier than the railways giving point to point service resulting in price stabilisation and consumer satisfaction. The business community needs not wait because of wagon shortage, transhipment because a truck has a smaller capacity and is flexible available 24 hours.

  1. Touching for-flung markets:

Much beyond the capacity of railways, the roadways are known for reaching impregnable market particularly hilly regions where railways cannot reach.

  1. Lesser conditions of service:

The roadways do not insist on strict packaging requirements because of least transhipments shocks to goods carried. Again, damage claims are settled faster.

Demerits:

  1. Uneconomical over long distances:

Long haulages work out much costlier because disproportionate rise in fuel and spare-parts expenses.

  1. It is fair weather friend:

Roadways are closed during monsoons and winters resulting in handicapped movement of goods.

  1. Not suitable for bulk transport:

Bulky and heavy goods to be moved particularly over longer distances need railway services than roadways as it has a major limitation of carrying capacity.

III. Airways:

We cannot boast of airways in India as we do in case of railways and roadways because, it is underdeveloped and underutilised. It acts as a feeder or supporting transport means. Domestic capacity available is 115 lakh ton kilo meters but utilised only to the extent of 12 lakh ton kilometres in 1990.

International capacity corresponds to 218 lakh ton-kilo meters of which 175 lakh ton-kilo meters are used. India has 4 international airports, 92 aerodromes with 50 intermediate and 40 minor aerodromes.

Evaluation:

Merits:

  1. Fastest means of transport:

Air transport provides the speediest movement of cargo over the distant places by eliminating practically spatial barriers.

  1. All-weather friend:

It is known for its dependable service during the times of floods, wars, earth-quakes. It is all weather means, of transport though flights are cancelled due to bad weather conditions.

  1. Consumer satisfaction:

The level of consumer service and, hence satisfaction is of high order as it is known for immediacy, speed and least damage to cargo.

 

  1. Reduced inventory holdings:

As it provides fastest and uninterrupted service, capital investments in the form of stocks of goods is less. This is of particular importance in case of highly perishable items.

Demerits:

  1. It is costlier means of transport:

The cost of air transport is very high and there is limit of weight of cargo. Hence, it is suitable for light weight, high grade and costly items only.

  1. Limited coverage:

The planes cannot land at all the places of our choice. It connects metropolis and some important cities only.

  1. Limited cargo capacity:

The cargo capacity of a plane is much smaller because of its size as it works against the force of gravity.

IV. Waterways:

Waterways of the nation provide other alternative means of transport. Unfortunately, in India, waterways are not fully developed though she has a great potentiality.

Though India has 7,000 kilo meters of navigable river waterways, only 2,500 kilometrers are used. Again, we have 4,800 kilo metres of canals of only 600 kilo metres are navigable but hardly 400 kilo meters are actually used.

Evaluation:

Merits:

It is cheaper means of transport:

Inland waterways tariffs are much lower and, therefore it works cheaper for both short and long distances.

Most suitable for heavy and fragile products:

The items which are bulky and heavy and which are fragile can be moved with ease.

Loading and unloading facilities:

The sender of cargo has the facilities of loading and unloading from boats and wharves on and from steamers and barges. Even the receiver has the similar facilities.

No problem of congestion:

Waterways provide an independent movement unlike road system where road is meant for all kinds of vehicles creating the problem of congestion.

Demerits:

  1. Slow speed:

The speed of the boats and steamers is badly limited in case of canals and rivers. Goods needing quick movement as perishable can be hardly transported.

  1. Unreliable:

Changing seasons create problems. Winter may freeze the rivers and canals and summer eats the depth of rivers and canals. Again, the rivers are known for changing their course of flow.

  1. Limited service:

The inland waterways are connecting the given places. Again, the cargo capacity is quite limited.

V. Pipe-Lines:

Pipe-lines are the specialized means of transportation designed to move the items like crude-oil, petroleum, chemicals, coal, lime-stone, iron-ore, copper concentrates and gas. India has made a late beginning in this regard unlike U.S.A., U.S.S.R. and Middle-East, and the development is undertaken only in case of oil refineries to move petrol and gas from sources to markets.

The total pipe length in India, at present is of the order of 8,000 kilo metres owned by private and public undertakings such as Oil India Limited, Indian Oil Corporation and Oil and Natural Gas Commission. Biggest Pipeline is planned between Iran and India.

Evaluation:

Merits:

  1. Economical:

Crude oil or coal and gas transported through the pipe­lines works out almost 1/4 of railways and roadways.

  1. Uninterrupted service:

Pipe-line transportation presents all weather system to move the products. Absolutely there is no any wastage of time as it works round the clock.

  1. No danger of wastage:

As there are no occasions of loading and unloading, there is no scope for spilling, evaporation, pilferage and so on.

  1. Underground:

The pipe-line usually underground and, hence, takes no additional space. What is more important is that it traverses through difficult terrain.

Demerits:

  1. Initial heavy investment:

Though operational and maintenance costs are minimal, the capital cost of pipe-line is rather much higher and that is why a county like India has minimum length.

  1. Danger of enemy attacks:

In the periods of war and political hegemony, pipe-lines are more prone to enemy attacks thus jeopardizing the veins of supply to the entire nation. The production activities are grinded to halt.