Article citation information:
Benallou, I.,
Azmani, A., Azmani, M., Atik El Ftouh, M. Optimizing
transportation systems and mitigating risks: a comprehensive analysis of
distribution supply chain challenges. Scientific Journal of Silesian University of Technology. Series
Transport. 2023, 121,
19-30. ISSN: 0209-3324. DOI: https://doi.org/10.20858/sjsutst.2023.121.2.
Imane BENALLOU[1],
Abdelah AZMANI[2],
Monir AZMANI[3],
Mouna ATIK EL FTOUH[4]
OPTIMIZING TRANSPORTATION SYSTEMS AND MITIGATING RISKS: A COMPREHENSIVE
ANALYSIS OF DISTRIBUTION SUPPLY CHAIN CHALLENGES
Summary. The
effectiveness of the transportation system aids in the successful economic
development of any nation, as studies by foreign scientists have shown that
road transport is one of the most critical contributors to budget revenue.
Nevertheless, the quality of the products and services offered to the end user
affects any company's reputation, market share, and financial stability. Being
proactive is essential to ensuring low-risk impact, which entails developing a
risk management plan to support the operation through well-defined policies and
practices. On the one hand, the company will thus be able to differentiate
itself in an often competitive market by implementing an effective shipping
protocol that considers and plans risks; on the other hand, it will guarantee
its customers a timely delivery, as planned. This article focuses on the
various problems affecting the distribution supply chain and the negative
consequences for the company's image and financial performance.
Keywords: distribution
logistics, risk management, company's image, quality of service
1. INTRODUCTION
For most
observers, the supply chain today reveals the pertinent level of competition
analysis. The latter is based on maximizing revenues and minimizing the costs
of making products available to consumers while achieving increasingly short
reaction times. This creates a competitive climate, obliging companies, on the
one hand, to offer logistics services at prices that ensure better
competitiveness and, on the other hand, to adopt a strict policy of cost
reduction. Companies are thus compelled to effectively manage stringent
constraints on deadlines, flexibility, and the diversity of goods, among other
things.
Risk
management then became one of the main concerns of carriers and logisticians,
especially with the volatility and instability of the global business
environment [1].
In this
context, through our research work, we aim to provide optimal and responsive
decision-making support to help logistics companies and carriers prevent risks
related to the distribution supply chain to prevent the rapid onset of acute
crises.
Our study
begins with the analysis stage, which consists of specifying the general
problem related to the outbreak of a crisis at the level of the distribution
supply chain in order to identify the leading causes of this crisis and
highlight their potential consequences.
Typically,
the outbreak of a crisis in a distribution supply chain can be related to the
following problems:
·
The problem of late delivery.
·
The problem of damage to the goods.
·
The problem of incorrect delivery.
·
The no-load return problem.
·
The problems of unavailability of logistics resources
and goods at the right time.
·
The problems of accessibility to logistics areas
(departure or destination area).
We will detail, in the following, the problems mentioned above.
2. Identification of the causes of a crisis in the distribution supply
chain
2.1.
Risk of late delivery
Delivery delays may be due to
factors related to the route taken, such as:
·
Congestion on the road network [2]
·
Road infrastructure characterized by narrow streets
[3]
·
Restrictions on delivery times [2] and tonnage.
Events can occur and increase the
risk of delay, such as vehicle breakdowns, accidents, bad weather conditions,
and driver discomfort [4].
Sometimes delays may be recorded
with the customer due to a complaint or claim. Delays may also arise from the
unloading and loading processes at both the shipper and the customer due to,
for example, the unavailability of personnel or facilities unsuitable for
loading and unloading or a lack of accessibility [2].
The requisition of the vehicle is
also a source of late delivery, as is the type of vehicle used. In fact, for
urban deliveries, Heavy Goods Vehicles (HGV) spend an average of 30 minutes for
delivery, 20 minutes for Light Goods Vehicle (LGV), and 10 minutes for trucks
and cars [5].
Logistics platforms can cause delays
if they are located far from customers and recipients or in locations that are
difficult to access or even inaccessible [6].
2.2.
Risk of damage to the goods
The good condition of the delivered
product is of paramount importance for the customer; the latter requires that
[7], [8]:
·
The packaging is not broken or opened
·
Items must be well packaged
·
The items show no signs of friction or scratches
·
Articles are not overwritten
Goods may deteriorate in warehouses
as a result of improper packaging or the occurrence of an adverse incident [9].
Damage to the goods may also occur due to the poor progress of the delivery
operation [10].
On its way to the
recipient
Several incidents can cause
deterioration of the transported goods during the transport of the goods, for
example: accidents, collisions, rock falls, theft, bad weather conditions [11],
and illegal emigrants in the vehicle transporting the goods. This damage will
be considerably more significant if the goods are fragile or perishable [12],
[13].
Other damage may occur to the goods
being transported, especially if the vehicle used is inappropriate or because
of compression due to the stacking of packages or a bad driving habit that can
cause shocks that would be as important as the fragile goods being transported
[14]. Sometimes, transporting goods over long distances can also cause
deterioration of the goods [15].
In warehouses
Stored goods may be damaged in the
warehouse for different reasons:
·
Planning and organization: Poor organization is responsible for a large
number of accidents, on the one hand because load drops, affect both the safety
of personnel and the goods [16]. On the other
hand, dangerous reactions can also occur if incompatible products are stored in
the same area; these reactions can take the form of heat release, combustion,
explosion, and the formation of toxic or flammable gases.
·
Natural disasters: According to the Disaster
Epidemiology Centre (CRED), a disaster is a situation or event that disrupts
the normal functioning of regular operations in a region, necessitates external
assistance, and results in extensive destruction, damage, and suffering [18]. A
natural disaster is caused by geographical, meteorological, climatic events,
hydrological and biological (epidemics) [18], and it can be classified
according to its duration into slow-onset or sudden-onset events. Slow-onset
events include droughts and famines, while sudden events can include tsunamis,
floods, storms, and earthquakes. Natural disasters are increasingly severe for warehouses, given their
scale, complexity, frequency, and impact on the building, equipment, and goods
in storage [19]. Several factors make the warehouse vulnerable to these disasters; these
factors can be summarized in the following table.
Tab. 1
Vulnerabilities of warehouses to
natural disasters
Factors |
Description |
Construction of buildings |
Non-compliance with building construction
regulations to ensure optimal resistance to risks |
Weaknesses in prevention systems |
Lack of relevant and effective means of
prevention (communication, awareness, and instructions) |
Means of protection |
Lack of means of protection against these risks. |
Monitoring and means of alerting |
Weak monitoring and lack of means of alerting |
Means of rescue |
Lack of emergency means |
Training |
Lack of training for intervention, first aid,
rehabilitation |
·
Fire: The judicious organization of the various equipment
that can be held in a warehouse and allocating products to suitable locations
considerably reduces the likelihood of industrial risks. Indeed, many incidents
of varying severity can occur in warehouses due to the inappropriate ability of
existing facilities, deficiencies in internal organization, or misuse of
equipment. Fires are considered one of the most dangerous incidents due to
their spreading effect, which can lead to long-term loss of control. This
usually results in severe physical and human damage. The criteria contributing
to the increase in the vulnerability of warehouses to fire are presented in
table 2.
·
Malicious acts: A warehouse can experience several
malicious acts, which could significantly alter customer trust and negatively
influence the brand image. Indeed, we identify four categories of risks
illustrated in table 3. Several causes increase the probability of this type of
accident in a warehouse. We quote: lack of regular care and prevention
maintenance means, insufficient guarding, tarpaulin vehicle, unsupervised area,
warehouse premises in an unfenced area, knowledge of the value of the
commodity, and access controls are not coupled with the intrusion alarm system
or CCTV cameras.
Tab. 2
Criteria increasing the
vulnerability of warehouses to fire
Factor |
Description |
The design and internal
organization of the building |
The internal organization of the warehouse is
required to comply with various storage restrictions, such as the separation
of incompatible products. |
Nature and quantities of existing
products |
Stored products must be classified to assign
them appropriate locations. |
Types of packaging materials |
the type of packaging used is chosen to
reduce the heat load of storage. |
Human resources |
The staff needs to be sensitized and trained
against fire risk. |
Handling equipment and
installations |
It is recommended to regularly maintain the
equipment used in the warehouse without forgetting to check the condition of
the installations periodically. |
Highly inflammatory products |
Highly inflammatory products may occasionally
be present in a warehouse after development or maintenance work, for example,
a formidable danger source. |
Tab. 3
Categories of malicious acts risks
Categories |
Description |
Internal theft |
This problem is often felt in a warehouse's
different storage and preparation areas, and these disappearances may not be
noticed until the inventories are discovered. Most thefts are caused by staff
who can easily slip small goods into a pocket or bag, and bulky goods, whose
packaging is deliberately shocked, are carried to the dumpster before being
picked up at the end of the day. |
Theft on the quay |
This type of theft can occur during the
loading or unloading of goods on the quay or during visits by external people
or service providers. Waiting containers and parked vehicles are also
affected. |
External theft |
Points sensitive to intrusion (windows, main
doors, emergency exits) can let intruders, sometimes benefiting from internal
complicity, to steal several packages. This type of flight concerns the
entire site. |
Vandalism |
This is often the case of an act of revenge
(failed intrusion, dismissal, ...) targeting the degradation of equipment or
buildings and not the theft of goods. |
In the process of
loading and unloading operations
During indirect deliveries, the
goods are manipulated during loading and unloading operations, and the handling
and storage conditions may not be respected, consequently increasing the risk
of damage to the transported goods. This hazard will be all the more important
if the products handled are fragile [21].
For this reason, minimizing the
number of loading/unloading goods [26] and loading and unloading in LIFO mode
[27] makes sense. It is also recommended to place fragile goods on top of heavy
goods to prevent possible damage [15].
2.3.
Risk of erroneous delivery
An erroneous delivery may occur due
to an error in the entry of the order information or during the order
preparation. Errors in loading operations will also cause incorrect delivery.
2.4.
Risk of empty return
After delivering their goods,
transport companies are often contractually obliged to make an empty journey
[22]. According to the Mobility and Transport Department attached to the
European Commission, 23% of all kilometers traveled in 2015 by heavy goods vehicles
in the European Union were trips to empty. In the absence of a load, the
vehicle must return empty, most of the time at the carrier's expense. This
return at Empty is not just a wasted resource in Economics; It is increasingly
considered an environmental problem. This problem is due to the weak
collaboration between carriers afraid to share confidential information about
customers and their orders with collaborators. This prevents them from reaping
the benefits of establishing a partnership approach.
In addition, the lack of information-sharing
platforms and physical resources between carriers (freight exchanges) hinders
any possible collaboration.
In addition, to optimize the
physical flow of vehicles and goods, carriers use integrated systems based on
new information technologies. This will allow them to guarantee the efficiency
of all delivery activities [23]. However, these systems are often expensive,
which does not encourage carriers to purchase these systems or pushes them to
opt for IT providers offering non-powerful solutions at low prices. In
addition, artisanal carriers often work informally and do not perceive the
value of procuring sophisticated software.
2.5.
Risk of unavailability of logistics resources and
goods at the right time
A logistics operation may also be
threatened by the risk of unavailability of logistics resources; this
unavailability may concern:
· Vehicles: The problem of vehicle
unavailability may be related to an insufficient number of vehicles in the
fleet or momentary unavailability due to maintenance, for example. Also,
undesirable events can occur unexpectedly, such as: breakdown, theft,
requisition, or blockage during its journey, and cause vehicle unavailability.
· Drivers: The unavailability of the driver
negatively influences the smooth running of the delivery operation. It can be
due to illness, strikes, or organizational conflicts.
· The
merchandise: Goods may
also be unavailable at the time of delivery due to theft during delivery or
loss. Losses caused by the theft of goods often involve the transport company's
personnel, including order pickers, handlers, or delivery drivers. They can
also occur due to organized attacks during the delivery of goods, mainly if
these deliveries occur in insecure areas outside peak periods [24]. To
guarantee safety, insurance costs are added; in addition, a team of assistants
must be present to check vehicles and goods during unloading operations. What
contributes to the service's price increase [25].
· The
warehouse or exchange point: The unavailability of the warehouse or exchange point may be due to
several causes, including: storage capacity saturation problems, lack of
handling facilities, presence of long queues to load or unload goods from and
to an exchange platform, social movements of internal staff, lack of staff,
non-existent or reduced availability due to incidents (fire, vandalism) or
natural disasters.
2.6.
Problems of accessibility to logistics areas
(departure or destination area).
Accessibility to the departure or destination
area is influenced by the following:
·
Traffic flow: mainly associated with congestion
occurring during peak hours when many vehicles condense. This makes access to
the city complex and strongly influences the efficiency of carriers [26].
·
Road infrastructure: this problem is often felt in the
case of urban delivery, as in the city center, the physical dimensions of the
streets are generally narrow, and delivery areas are non-existent or small in
size that are difficult to locate and often occupied.
·
Restrictions: include delivery times, vehicle size,
and tonnage of goods transported.
3. Identification of the consequences of poor risk management of the
distribution logistic
The distribution supply chain must
offer an optimal response to customer demands, despite the ups and downs that
can disrupt it. However, achieving this is sometimes very difficult, leading to
severe repercussions. These impacts occur on two fundamental levels:
·
Financial impacts.
·
Impacts on the company's image.
3.1.
Financial impacts
The financial consequences relate to
the additional costs induced by poor supply chain risk management, visibly
reducing the carrier's profitability.
In fact, each risk will eventually
have a relatively severe and lasting impact on the company's financial
performance [27]. This also concerns the decisions taken, the actions carried
out by the actors, the fraud suffered, the operational errors causing a
customer complaint to be processed, and the input errors. Everything can cause
financial losses ranging from a few euros to several hundred million euros
[27].
The problems of a logistics
distribution operation have severe financial impacts, as they alter carriers'
profitability, reduce their competitiveness, and lead to a loss of resources
[28]. These financial consequences relate mainly to generating additional
costs, decreases in revenues or revenues, a lousy customer relationship, and a
loss of marketplace in the face of competition.
Transport is a key logistics
function in the supply chain, contributing 40-60% of logistics costs [29].
These costs can be calculated from equation (1):
where:
Cl represents logistics costs.
Ct indicates transport costs.
Cs stands for storage costs.
Cf represents fines due to poor quality service.
Cd indicates impairment costs.
Cr refers to costs related to logistical risks.
Ch represents hidden (latent) costs.
Thus, to evaluate the course of the
operation of the delivery of the goods, we can use the following indicators:
·
Compliance
with order delivery deadlines.
·
Customer
satisfaction with services.
·
The
condition of the goods ordered.
·
The
duration of delivery.
·
The
performance of the vehicle.
These indicators directly affect
logistics costs; compliance with delivery times, the quality of delivered products,
and consumer satisfaction with the transport service will significantly reduce
logistics costs. The delivery time is crucial because an increase in delivery
implies an immediate increase in logistics costs.
Vehicle performance has a noticeable
impact on logistics costs, as increasing productivity means reduced transport
costs and fewer vehicles used. However, overloaded vehicles carry a high risk
of road accidents due to the shifting center of gravity and unequal weight
distribution along the vehicle's axes.
3.2. Impact on the
company's image
Literature review
In the literature, several
definitions exist for the company's image, [30] define the company's image as
„A set of meanings by which an object is known and through which people
describe, remember and relate to it.». [31] considers it to be "a
sum of beliefs, attitudes, and impressions that a person or group has of a
company ». In addition, the company's image was identified as “a
factor affecting how people make sense of problems and events and the
motivations for acting on them" [32], [33]. According to [34]: “It
is a model signifying our beliefs and our understanding of a phenomenon or
situation".
According to [35], the company's
image can be fabricated and does not reflect the reality of a company. It
focuses instead on the company's reputation rather than its image, as
reputation addresses social assessments of stakeholders and opinions of a
company [36], [37]. Some claim that a corporation's reputation is a component
of its image, while others contend that a company's reputation is determined by
its constituencies' perceptions of it [37]. Moreover, some even consider these
terms synonymous [38].
In this work, we consider that there
is no difference between the image and the reputation of the company, and we
adopt the definition of Barich and Kotler (1991), who consider that: “the
image of the company is a set of perceptions, experiences, and attitudes that
an individual has of a company ".
Company image and
quality of service
The company's image is becoming
increasingly critical when offering services; more often, a poor reputation
leads to the bankruptcy of service-oriented businesses [39].
The presence of dissatisfied
customers degrades the company's image, which negatively impacts the carrier's
competitiveness and jeopardizes its existance [40]. Because of this, customer
loyalty is often seen as an inevitable problem in managing every business
looking for a sustainable presence in the desired market. Then, customer
satisfaction is vital since it provides marketers and business owners with an
indicator of how to manage and improve their businesses. By gauging client
loyalty, consumer satisfaction can also be used to predict how long a product
will continue to be sold or produced. Customers' satisfaction will guarantee
business continuity, which means continued operation. Midway through the 1950s,
production costs were steadily growing, and the way to keep the company's
position in a shifting market and improve earnings started by concentrating on
customer service and cost-cutting. As a result, logistics activities have
become these organizations' fundamental support system, so the quality of the
logistics service offered is seen as a vital factor in the competitiveness of
carriers, and that ensures optimal customer satisfaction and increases the
chances of captivating new customers.
A good quality of service requires
that the goods are delivered in the best quality conditions, cost, and time.
The role of logistics in this phase is to ensure proper management of
warehousing, to guarantee the quality of the means and conditions of transport,
and to ensure that delivery is carried out on time and in place. According to
[41], quality of service encompasses quality of staff service, operational service
quality, and technical service quality. The result of his research indicates
that staff service quality and technical service quality strongly influence
customer satisfaction. Additionally, his research believes in a significant
connection between customer satisfaction and loyalty.
4. Conclusion
In this article, we have examined
the various risks threatening the distribution supply chain. We have also
focused on their financial impact and influence on the carrier's image.
This comprehensive analysis underlines
the importance of optimizing transport systems and mitigating risks in
distribution supply chains. This requires leveraging advanced technologies,
such as real-time tracking systems, predictive analytics, and artificial
intelligence, to improve visibility, optimize routes and proactively manage
risks. Furthermore, effective coordination between manufacturers, suppliers,
distributors, and transport providers is essential to streamline operations,
minimize delays and respond quickly to unforeseen disruptions. Furthermore,
implementing sustainable practices can reduce environmental impact and also
contribute to cost savings and regulatory compliance.
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Scientific Journal of Silesian University of Technology. Series
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[1] Intelligent Automation Laboratory, Abdelmalek Essaadi
University, FST of Tangier, Km 10 Ziaten B.P: 416 Tangier, Morocco. Email: ibenallou@uae.ac.ma.
ORCID: https://orcid.org/0000-0002-2713-3407
[2] Intelligent Automation Laboratory, Abdelmalek Essaadi
University, FST of Tangier, Km 10 Ziaten B.P: 416 Tangier, Morocco. Email: abdellah.azmani@gmail.com.
ORCID: https://orcid.org/0000-0003-4975-3807
[3] Intelligent Automation Laboratory, Abdelmalek Essaadi
University, FST of Tangier, Km 10 Ziaten B.P: 416 Tangier, Morocco. Email: monir.azmani@gmail.com.
ORCID: https://orcid.org/0000-0002-7434-3781
[4] Intelligent Automation Laboratory, Abdelmalek
Essaadi University, FST of Tangier, Km 10 Ziaten B.P: 416 Tangier, Morocco.
Email: mouna.ftouh@gmail.com. ORCID: https://orcid.org/0000-0003-4581-5361