January 2012 | Sponsored | Knowledge Base

Tough Economic Times Require LEAN Logistics Solutions

Tags: Lean

Eric Lail, Vice President, LEAN Performance Solutions, Global Shingo Prize Examiner, Transportation Insight, 828.485.5000

With economic pressures rising, companies must seek ways to evaluate their current state, and design a future state that surpasses their strategic goals and their customers' expectations. Manufacturers, retailers and distributors are constantly working to improve their performance in quality, cost, delivery and service. With those goals in mind, forward-thinking organizations are pursuing LEAN assessments to evaluate their supply chain, combined with innovative LEAN solutions to help them design the future state of their value stream. Companies are seeking deep data analysis, on-site operational reviews and customized supply chain solutions to help them save money, improve control and increase productivity in the future state of their logistics operations. It's this process of evaluation and innovation that ultimately enables companies to sustain competitive advantage and dominate their market.

A "value stream" is comprised of processes—value added and non-value added—required to bring a product or service to the customer. At Toyota, where this concept was developed, value stream maps depict the material and information flow paths to highlight opportunities for improvement. While many companies still operate in silos, a "value stream" approach implies that a company is working continuously on the "big picture" to include total costs, total quality systems and service from the eyes of the consumer. Conversely, organizations with silos have like-processes grouped in their manufacturing, distribution or administrative environments, resulting in longer lead-times and large amounts of stagnant inventory. By eliminating waste and improving processes, companies can quickly and drastically shrink lead-times. A windfall of positive change follows, such as increased cash flow, reduced costs, enhanced quality and reduction of necessary floor space.

Dr. Eliyahu Goldratt, author of The Goal and best known for his Theory of Constraints says, "The core problem with most companies is the administration of sophistication. When you have a complicated system, complicated solutions do not work!" Goldratt says the most complex systems require the simplest solutions. Many people think that LEAN is a set of tools like the Theory of Constraints. The more you learn and practice, however, the better you understand LEAN is a set of principles that uses certain tools within structured systems of processes to allow companies the ability to satisfy their customer's demand. With the right process, any company can be successful.

What is required to begin a LEAN journey across your supply chain? Upper management must be totally committed to the journey. It is not a "magic pill" for an organization. If it were, everyone would be successfully implementing LEAN practices. Top management must pioneer their teams into the unknown and lead by example. Jonas Salk who developed the polio vaccine once said, "Hope lies in dreams, in imagination and in the courage of those who dare to make dreams into reality." Are you personally attempting to learn and practice LEAN methodologies? What are you doing to drive out wastes within your own organization? These are two humbling questions for leadership teams to consider while feeling the increasing pressures of a volatile global economy.

By developing fully integrated LEAN solutions, companies can execute with excellence and begin to create their LEAN leadership capabilities from within. They change their internal culture and embrace continuous improvement across their supply chain and their organization.

Our LEAN Solutions Teams help companies reduce overall lead-times, inventories and changeovers. We have real-world experience in making that happen for our clients. In addition, logistics experts within our organization partner with clients in deploying LEAN principles to significantly improve carrier sourcing—both domestic and international—and warehousing, all the while increasing speed to market and customer value. Streamlined processes in related areas such as financial settlement, supply chain technology and business insight provide additional game-changing advantages. Value-added services such as the sourcing of indirect materials, packaging and MRO round out our strategic offerings.

At Transportation Insight, we leverage industry expertise and intellectual capital to create new, customized ways to help clients meet their business goals. Providing logistics engineering, financial analytics and cutting-edge technology, we create distinctive, end-to-end supply chain solutions in concert with our clients. It is this co-managed, continuous improvement approach that enables our clients to achieve sustained competitive advantage. Through evaluation, innovation and best-in-class supply chain solutions, we help our clients dominate their market!

Transportation Insight provides LEAN logistics solutions, and sister company Total Insight offers LEAN Consulting. Eric Lail is Total Insight's VP of LEAN Performance Solutions. Lail is one of the world's 250 Shingo Prize Examiners and a LEAN supply chain expert. If you would like more information, please contact us at 828.485.5000 or www.transportationinsight.com.