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Moving Urban Goods: It's All about Supply Chains 21
Performance
The primary issues for the company's urban logistics include traffic congestion (both general
and related to construction), timely access to loading docks, and maneuvering space. Megastores
are located in major metropolitan areas and deliveries are constrained by limited delivery times.
Often, deliveries must be made within less than an hour's time at a specific time of day. Because
of prolonged morning and evening rush hours and schedule constraints, the company is often
forced to operate simultaneous deliveries to megastores, which increases logistics costs.
Docks at delivery locations are rarely sufficient in number, and maneuvering areas are nearly
always confined. These space limitations exist at both shopping malls in suburban areas and
megastores in the central business district. Older shopping malls often have a common loading
dock area shared by many stores, which complicates and constrains deliveries. The most opti-
mal loading facilities are newer malls that provide load doors or docks for each store or for a
small group of stores. Although late night or early morning deliveries may be an option, trailers
and cargo trucks are seldom left loaded and unattended in store loading docks overnight because
of security and product theft issues.
Case Illustration 4: Aggregate-Based Construction
Materials Supply Chain
Overview
The aggregate-based construction materials supply chain includes multiple inputs, sources,
consolidation points, and transportation modes. The interrelated processes of cement and ready-
mix concrete production and transport illustrate this complexity. Cement production occurs in
a limited number of locations in the United States and must be sited close to a limestone source.
The powdered cement product is typically transported to cement terminals by rail or barge
and then brought onward to ready-mix concrete plants by truck. At the same time, aggregate
materials are transported to ready-mix concrete plants as another production input. The cement
and the aggregates are combined to produce ready-mix concrete: a highly perishable substance.
Once a batch is mixed at the production plant, mixer truck drivers have only a few hours to get
ready-mix concrete to the construction site and poured in place. See Exhibit 3-4.
Performance
Supply chain performance is highly dependent on facility siting. Cement production plants are
always situated near a limestone supply that ideally is near barge or rail access, for ease of bulk
transport. It is also ideal for ready-mix concrete production sites to be located close to aggregate
deposits, also to reduce bulk transport costs. Simultaneously, the time-sensitive nature of the final
product makes it necessary for ready-mix production sites to be close to destination construction
sites. Typically, transport of ready-mix should take no longer than 1 hour for road construction
and no longer than 2 hours for residential and commercial construction. This requires that ready-
mix concrete plants (which are relatively mobile) be established near points of use and that each
facility has a very precise approach to final production and delivery scheduling.
Local regulations have become high barriers to efficient production and transport of aggre-
gate products. It is becoming increasingly difficult to obtain conditional use permits for the many
processes involved. Siting potential facility locations typically requires preventive company
actions including street sweeping, dust control measures, backup alarms, pollution controls, and
covered stockpiles. As a result, construction of new facilities in optimal locations is both time-
consuming and expensive. For instance, because of the increasing complexity of environmental
