Source: Adapted from P.O. Roberts (2003) Supply Chain Management: New Directions for Developing Economies, PSD Professionals’ Forum.
A transaction between a supplier and a customer involves the transfer of inventory from one location to another. For a simple transaction, this can take the form of a single truckload. However, a logistical perspective on this transaction reveals a complex series of tasks and processes.
Suppliers usually maintain an item price list for their customers where they can quote a price. A customer can then issue an order, which is acknowledged. A this point, the supplier becomes the shipper while the customer becomes the receiver of the order. If the shipper does not offer own account transportation, the service can be tendered to a carrier at a negotiated rate.
Once a shipment has been tendered and scheduled, it needs to be prepared into a suitable load unit for the conveyance, such as pallets. The carrier will then dispatch a vehicle from its fleet to the shipper’s location so that the shipment can be loaded. The carrier, shipper, and receiver will trace the shipment since it is related to the timing of loading (shipper), transport (carrier), and unloading (receiver) assets.
The receiver, expecting the arrival of the carrier, will schedule dock space accordingly, then receive the shipment, and unload the items from the vehicle. By collecting the delivery receipt, the carrier then considers its part of the contract fulfilled, allowing it to issue a bill for the service. The receiver can pay the carrier’s freight bill and the shipper’s invoice.