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The effect of freight transport time changes on the performance of manufacturing companies

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  • Sambracos, Evangelos
  • Ramfou, Irene

Abstract

Freight Transport Time (FTT) is an important resource for manufacturing companies, firstly as a cost driver of logistics processes and secondly as a key factor of customer satisfaction. Yet, there is a lot of controversy between researchers regarding the strength of the link between changes in transport time and business performance and the methods used to measure this effect. In this context, the aim of this paper is to estimate the effect that changes in freight transport time have on the economic performance of transport consuming manufacturing companies. With the use of System Dynamics Modelling a simulation model is built identifying the role of FTT in the internal supply chain of a Make to Stock manufacturer. Changes in FTT are introduced in the system affecting the production materials inventory replenishment time and the delivery to consumer time. Simulation results suggest that the effect of FTT changes depend highly on the structure of the company’s decision making process. Through the development and simulation of several scenarios it is evident that information feedback about changes in FTT if interpreted and processed by different decision rules and strategies can lead to different results allowing companies to fruitfully - or not - reap the benefits of improved FTT.

Suggested Citation

  • Sambracos, Evangelos & Ramfou, Irene, 2013. "The effect of freight transport time changes on the performance of manufacturing companies," MPRA Paper 51842, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:51842
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    Cited by:

    1. Faisal Santiago, 2017. "Trade Secret Protection on Globalization Era," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 66-76.
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    3. Ismail Magerramovich Aliev & Viktor Ivglafievich Sigov, 2017. "Creating a Learning Organization as an Increase in the Adaptability of a Company's Human Capital to the Volatility of the External Environment," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 57-69.
    4. Vasudha Garde & Viesturs Pauls Karnups, 2017. "Assessing the Role of Latvia's Participation in Indo-EU Value Chains," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 942-960.
    5. Sambracos, Evangelos & Ramfou, Irene, 2015. "Do freight transport time savings translate to benefit for transport consuming companies?," MPRA Paper 68558, University Library of Munich, Germany.
    6. Rudi Bratamanggala, 2017. "Implications of Tax Receivables and Retribution for the Economic Growth of Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 570-579.
    7. Yolanda, 2017. "Impacts of Export Development on Unemployment in Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 758-773.
    8. B.G. Khairov & D.T. Novikov & T.A. Prokof'yeva & I.O. Protsenko & S.M. Khairova, 2017. "Reflexive Governance of Import Substitution Mechanism in Clusters," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 470-483.

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    More about this item

    Keywords

    Freight Transport Time; Manufacturers; Performance; Systems Dynamics.;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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