How to Achieve Lean Logistics

Lean management is a philosophy of operations organization that originated in Japan. Implementing lean logistics within the supply chain requires the identification and elimination of activities that do not contribute value. The essence of the lean concept is to achieve more with fewer resources.

Principles of Lean Logistics Methodology

  • Identify activities that do not provide value to the customer.

Tools like value stream mapping assist in pinpointing the tasks that constitute a specific process. For instance, the picking operation can be broken down into sub-processes. 

  • Recognize waste and areas for enhancement.

In logistics, waste is frequently associated with time lost. To effectively carry out this phase, it is crucial to standardize tasks and uphold cleanliness and organization throughout the operation.

  • Develop a new optimized process flow.

This involves creating a more efficient working method regarding time utilization and service quality. To achieve this, it is necessary to eliminate unnecessary tasks that are considered wasteful.

Alongside organizational modifications, this phase may also require investment in new technological systems that assist in removing stages that consume additional time without adding value.

  • Adopt pull strategies to reduce inventory levels.

The stock maintained in the warehouse significantly influences logistics costs. Unlike push strategies, which are based on production according to sales forecasts, pull manufacturing methods focus on generating sales first and then promptly responding by supplying the product.

  • Standardize new processes and ensure sustained change over time.

To accomplish this, it is essential to engage and motivate all employees. They must receive adequate training to develop the new habits and skills required.

Strategies for Reducing Waste in Lean Logistics

Waste can be categorized into four primary groups. Below are its features and methods for reduction:

  • Excess Inventory

The reasons for this are typically associated with overproduction as well as inaccurate forecasting. Occasionally, ‘safety stock’ is inflated under the guise of being necessary. Ultimately, it serves to mask poor supplier management and/or chaotic material flows.

This results in wasted warehouse space, leading to higher storage expenses and low-turnover inventory that is rarely replenished.

Some strategies implemented to address this problem include:

  • Cross-docking, which maintains inventory levels at a strict minimum.
  • The Just-In-Time approach in managing suppliers and organizing warehouses.
  • Reduced lead times concerning suppliers and intralogistics processes. This enhances the accuracy of demand forecasting; the closer the forecasts are to real-time, the more precise they will be. Consequently, overstocking can be avoided.
  • Delays and Bottlenecks

Lean logistics focuses on minimizing the gap between execution time (the time for which you compensate your employees) and standard time (the time billed to your customer). This practice will yield cost reductions as inefficiencies become apparent.

The causes can vary but often stem from poorly designed work methods, unresolved incidents, or imbalances in operator workloads.

To address this from a lean logistics perspective:

  • Ensure that each employee’s workload is monitored to prevent some from being idle while others are overwhelmed.
  • Make certain that equipment malfunctions do not hinder warehouse operations. It is advisable to implement a preventative maintenance schedule for warehouse equipment. Additionally, having technical support available is beneficial for resolving incidents promptly.
  • Unnecessary Movements

Picking and order preparation tasks are among the most time-consuming activities in warehouse operations. Consequently, inadequately planned picking lines can negatively impact productivity. This can lead to unnecessary trips (such as utilizing unloaded equipment) or an increase in additional movements.

To address this issue using lean logistics methodology:

  • Automating load handling is an effective strategy to reduce intralogistics transport times. Simultaneously, it enhances safety across all operations. Indeed, automation yields outstanding results, particularly in processes involving repetitive movements.
  • The specific order preparation method employed also influences wasted movements. A warehouse management system can assist in optimizing picking routes within the warehouse.
  • Errors Leading to Returns and Repeated Processes

In general, higher quality is often linked to increased costs; however, this is not universally true. In fact, leading companies in the logistics industry are recognized for providing exceptional service at competitive prices.

They achieve this by consistently getting it right on the first attempt (thus avoiding the need to redo the work) and as a result, they can command higher prices.

To address this from a lean logistics viewpoint:

  • If returns management is complicating your warehouse operations, it is advisable to pause and analyze the underlying causes of the returns.
  • Timely identification of incidents is a beneficial practice that eliminates the necessity of repeating work or tasks.