Lean Manufacturing Applied to Logistics
Lean Manufacturing creates a culture of continuous improvement in the corporate microcosm.
Lean Manufacturing means “lean manufacturing”, in a free translation. A methodology created in Japan after the Second World War by Taiichi Ohno, an executive from one of the most competent automobile industries on the planet, Toyota. Proponents say it can increase productivity by up to 30%, reduce expenses by 20%, and grow cash flow by a respectable 10%!
The term Lean Manufacturing was popularized with the book “Lean Thinking in Lean Thinking Companies: Eliminate Waste and Create Wealth”, written by James P. Womack and Daniel T. Jones. The “lean thinking” in the book’s title has inspired thousands of entrepreneurs and executives since then.
We are talking about a concept that creates a culture of continuous improvement in the corporate microcosm. That is, getting the right materials, to the right place, in the right volume, minimizing waste and being flexible, open to change. For this to happen, most costs are calculated while the product is still being designed, also reducing financial risks.
According to the Academia de Executivos website, “the key points of Lean Manufacturing are:
- Immediate total quality — going in search of “zero defects”, and detecting and solving problems at their source.
- Waste minimization — elimination of all non-value-added activities and safety nets, optimizing the use of scarce resources (capital, people and space).
- Continuous improvement — cost reduction, quality improvement, productivity increase and information sharing
- “Pull” processes — products are withdrawn by the end customer, not pushed to the end of the production chain.
- Flexibility — quickly produce different batches of a wide variety of products without compromising efficiency due to lower production volumes.
- Building and maintaining a long-term relationship with suppliers by making agreements to share risk, costs and information.”
Due to the Toyota Production System, which among other things presented the business world with the “Just In Time ” model, several Japanese expressions became famous, such as Kanban (means “card” or sign board and became known for being a methodology visual management, with information cards that record the actions of the industry, as if it were a large bulletin board), Kaizen (means “improvement” or in business reality, continuous improvement through the standardization of production processes) and Poka- Yoke (means “error-proof”, that is, it is an inspection tool created with the objective of preventing human errors and correcting eventual errors).
All this may seem very logical today, but it was revolutionary in Japan in 1953. The concept of Lean Manufacturing turned Toyota into a world reference in business management. The methodology proved to be so effective that it was used in other areas, in addition to the manufacturing sector. Logistics was one of the segments that adopted Taiichi Ohno’s lessons.
According to Thiago Coutinho de Oliveira, executive director of the Voitto group, Lean Logistics is based on three fundamental concepts:
- “ Investing in batch size reduction— In order to manage inventory more efficiently, it is necessary to reduce the size of batches for suppliers and customers, so this is the first fundamental concept of Lean Logistics. But, to reduce the size of raw material batches, it is not enough to ask your suppliers to reduce it immediately, as this is not feasible and would only result in unexpected problems. First of all, it is necessary to invest in competent resources that make this reduction possible. The same goes for intermediate batches and finished products. Here comes the concept of milk run, which is a delivery method in which, instead of each supplier sending a vehicle to meet the weekly needs (large batches) of customers, a vehicle collects deliveries from each supplier, thus being able to supply the daily demands (small batches) of customers.
- Increase delivery frequency — To increase the delivery frequency of raw materials, intermediate and finished products, involving both your customers and suppliers, which is one of the consequences of batch size reduction, it is also essential to first prepare, structure and implement a management system that enables compliance with this second fundamental concept of Lean Logistics.
- Achieving flexible and efficient production leveling — When leveling the production of products manufactured in a company, it is first important to make sure that the flexibility of its production processes is properly adapted to meet this condition. There is no point in scheduling the production of a high variety of products in one day, if the set up time and low levels of productivity are still realities.”
To apply the concepts suggested by Thiago Coutinho de Oliveira, it is necessary, as he himself says, to prepare the ground, with the “Just In Time ” methodology, with everything at the right time, in the correct amount and in the predicted place. Lean Logistics aims to constantly optimize routine supply chain processes by reducing costs. Finally, we are talking about reducing inventories, synchronizing logistical processes and optimizing storage and transport operations, eliminating waste.
But how to implement Lean Logistics? Investing in planning. In an article published in May 2020 on the TPC Group blog, experts suggest some basic actions for the entrepreneur or executive in the Logistics area:
- “ Mapping the processes — It’s the first step. With it, it will be possible to design the entire flow of information and materials necessary for the functioning of the organization. In this way, it is easier to identify bottlenecks, waste, delays and other problems that hinder the agility of logistical operations. For this, the mapping must involve all key parts of the process, that is, materials, employees, customers and suppliers. Finally, linking the information from all these stages will provide a macro view of the organization’s logistical functioning, promoting the location of weaknesses to be remedied and strengths to be improved.
- Improve critical points — After being mapped and visualized, the waste found in the process must be worked on. For this, continuous improvement plans must come into play. Programs such as 5S , Kaizen, PDCA, Six Sigma and others can help. Choose those that have more affinity with the company and add them to the processes. Here, the important thing is that the tools contribute to the continuous flow of the logistics chain.
- Standardize logistical processes — After carrying out the previous steps, it is time to standardize logistical operations. This step ensures that the tasks are better performed, so that it is possible to offer your customer, services and products of higher quality. It is very important that the implementation of Lean Logistics generates value for its consumer, which is the main objective of customer centric companies. In addition to these steps, it is essential to carry out actions so that the implementation of the program is effectively carried out. Some of the points to be considered are: ensuring efficient data processing; study and know the customer well; create smart supply routes.”
(The text above was written using information from academiadeexecutivos.com, voitto.com.br, grupotpc.com, terzoni.com.br, 2blean.com.br, portaldaindustria.com.br, nomus.com.br, caetreinamentos. com.br and siteware.com.br).