Lean Manufacturing practices have become a common aspect of production in practically any organization, but Lean is being applied to other sectors beyond manufacturing as well. In fact, Lean Management techniques can have a tremendous impact on logistics and transportation by reducing waste and improving efficiency.
Transportation management processes should be integrated with Lean implementation within a company, supporting the 8 Rights of Lean Management:
1. Right Materials
2. Right Quantity
3. Right Time
4. Right Place
5. Right Source
6. Right Price
7. Right Quantity
8. Right Service
Let’s look at how transportation can be optimized with Lean techniques, as well as the benefits of Lean Transportation for your company.
5 Ways to Optimize Transportation with Lean Management
The philosophy of Lean Manufacturing says that opportunities for improvement exist in even the best of current practices, as does waste. Most transportation networks contain a lot of redundant costs and waste, and these can be significantly reduced with the implementation of Lean techniques.
Here are 5 ways to incorporate Lean Transportation within your supply chain, and the benefit each of these methods provides to your organization:
1. Develop and Implement a Customer-Centric Strategy
As opposed to customer and inventory strategies being developed according to transportation strategies, the latter should be based on customer requirements and optimum inventory levels. Product delivery methods and timeframes should not depend upon transportation strategies either.
By reducing lead time from order to delivery, you can improve customer satisfaction as well as the quality of service. Understanding customer expectations and demand also reduces inventory risk and operating cost of inventory management.
2. Remove Excessive Waste in Transportation
Lean Management challenges existing assumptions about size-based cost efficiency, where frequent inbound and outbound movement of smaller batches is considered more expensive than transporting larger lots. This poses a challenge for transportation managers but transporting any more than necessary adds to transportation waste.
Along with reducing shipment sizes, inventories, and transportation costs, Lean Transportation also minimizes lead times. Faster shipments and deliveries lead to higher customer satisfaction, which is a key factor in any organization’s success.
3. Provide Measurable Performance Capability
As part of Lean Manufacturing, logistics service providers need to be treated as strategic rather than transactional partners. Organizations are encouraged to work with quality carriers, and transportation providers need to offer dependable service and continuous improvement according to measurable levels of performance capability.
For the transport industry, collaborating with shippers requires trust, teamwork and cross-function thinking. A commitment to servicing organizations in this manner can lead to quality long-term relationships.
4. Focus on Productivity for Cost Efficiency
The transportation cost structure is divided into unit costs and productivity costs (such as trailer utilization, waiting time for vehicles and weighing scales, total distance covered, etc.). The latter provides a larger opportunity for cost reduction according to Lean, so transportation managers should focus on these.
Optimizing productivity costs instead of focusing on carrier rates allows organizations to minimize the wastage of materials, time and effort while ensuring that carriers are not running unprofitably. It’s essentially a win-win for both.
5. Plan and Execute Daily Event Management
Occasional network designs don’t promote sustained cost savings in transportation. Instead, you need to focus on well-organized daily event management as well as the identification and reduction of waste.
Create and execute a daily transportation plan, check its actual condition, and perform problem-solving as well.
Focusing on a disciplined daily transportation plan helps to reduce operating delays, unnecessary costs and wasteful activities on a constant basis. This leads to better performance and process efficiency, thus boosting profits.
Lean Management principles can be applied at every step of the supply chain, and there’s a host of tools and technological advancements that can help you implement them. Today, everything from an industrial weighing system to the TMS used for logistics is designed to maximize productivity, streamline operations and minimize waste in the supply chain.
To Sum It All Up
These innovative supply chain solutions can easily adapt to dynamic customer demand, new freight shipping or auditing practices, advanced techniques and processes, and more. With current logistics trends keeping pace with Lean warehousing and manufacturing, this is a great time to explore your options!
Kevin Hill heads up the marketing efforts and provides technical expertise to the sales and service teams at Quality Scales Unlimited in Byron, California. He enjoys everything mechanical and electronic, computers, the internet and spending time with family.