Lean in the Logistics Sector

In some companies, Logistics is the entire business (i.e. a trucking company), while in other companies it may be only a Department, and still others, it may not even be a word they use.  Whichever category you fall into, all companies deal in logistics to one degree or another — that is — getting the product or service to the customer on time, with all the supporting processes that make that happen (or hinder it from happening properly).

In the world of Logistics most organizations claim that there are too many variables and therefore there is no way to control cost or on-time delivery.  These same organizations give a multitude of reasons (or excuses) as to why a delivery is late or why the cost of their shipping is constantly increasing. They tell their customers that “it’s out of our control.” 

Lean Thinking takes the opposite approach.  Instead of looking at all the things that cannot be controlled, we take the position that the vast majority of the delivery process is completely controllable and that, more often than not, it is also measurably improvable. If this were not true, than no one would have on-time delivery and everyone would have skyrocketing shipping costs.  Since that is not the case, we have empirical evidence that all processes can be improved.

Lean fully understands that things like unexpected bad weather or slow traffic from a five-car pile-up can have an effect on timeliness. And, as the “exception to the rule,” we will even accept these as legitimate excuses.  However, if you have anything less than 98% on-time delivery, you have an internal “process” problem.

Logistics is defined here as the planning and management of product, service, and information flow to the end customer. It includes increasingly complex technology, communication and control systems. 

Lean focuses on the parts of these various internal processes that can be controlled — and therefore — improved.  Examples include: the paperwork is not ready; idle time waiting for the product to be staged and loaded; the product is not ready; the packaging is not done; incorrect directions or wrong addresses provided; lack of communication between the transporter and the customer; vehicle maintenance is not done so the truck breaks down; plus the myriad of other reasons that we are not 100% prepared for every delivery, every time, in every way manageable.

Lean focuses on streamlining internal systems so that we are able to reduce or eliminate waste.  By doing this, the lead-time (from order to customer) is shortened, thereby making the shipping and delivery process more robust and more flexible.  By making the process more flexible, it allows the organization to focus its time and energy on those uncontrollable challenges (i.e. the exceptions to the rule).

There can also be a direct corollary between on-time delivery and employee satisfaction.  If employees are unhappy, de-motivated, or otherwise not valued by their company, we often see this manifest itself in poor delivery numbers and customer dissatisfaction. Therefore, employee motivation plays an important role in the Logistic industry. One of the basic Lean philosophies is that employees will be treated with respect and that their direct involvement with the process and its improvement is vital. By including employees in structured problem solving, Continuous Improvement Teams, and decisions that enhance their area, we always see an increase in morale, productivity and efficiency — therefore, in on-time delivery and customer satisfaction. 

Result we’ve achieved and you can expect:

• 65% reduction in load and unload times;

• 48% reduction in cost per cube;

• 30% reduction in fleet operating cost;

• 20-40% increase in productivity.

These are just a few of the savings we have achieved — how can we help you?

Allow us to come in to give you a preliminary assessment.

 “You can’t afford to wait until it’s too late.”

GDC-Total Business Solutions offers a full range of services that include mentoring programs, à la carte, workshops, project management, process-focused improvements or full Lean implementation.