In order to meet today’s instant delivery expectations, every step of a product’s creation and delivery needs to be optimized. Today, many companies are achieving this not by investing large amounts of capital, but through the application of lean manufacturing methods.
Lean manufacturing has two key building blocks: reducing waste and creating customer value (1). It means improving the efficiency of the manufacturing process and lowering waste and other costs to an absolute minimum. This not only reduces manufacturing costs but the environmental footprint of the product as well.
These advantages are only of limited benefit unless the same lean policies are rolled across the entire supply chain. Let’s take a look at three lean manufacturing trends to see how companies can benefit from their application.
Whether large or small in scale, warehouse organization plays a crucial role in the efficiency of the supply chain. In a non-lean environment, the layout of stock in a warehouse may be haphazard or located in an inadequate facility. Poor visibility of stock or hidden information could then lead to delays and lost sales. (2).
A lean warehouse is one that uses carefully planned stock layout and clear documentation to cut wasted time to the very minimum. Stock locations within the warehouse are strategically laid out with the expected flow of outbound products in mind. Vehicle traffic within the warehouse can move smoothly and efficiently thanks to a clear and planned separation of vehicle and pedestrian traffic (3).
Inventory control management is one of the most effective measures in reducing costs (4). Inaccurate planning of inventory levels may mean that stock is taking space unnecessarily, leading to an inflated estimate of warehouse storage needs. A lean manufacturing process will enable a company to minimize warehousing space and handling, resulting in lower competitive overall costs (4).
Better warehouse planning also allows goods to be located and shipped more quickly. Customers then benefit from an on time delivery at a lower cost.
Lean manufacturing processes do not only address loss due to infrastructure. They can earn savings in real human working hours. Consider the time that is lost when workers wait for stock replenishment or for documentation to ship goods internationally. Once seen as unavoidable, these delays are now considered as an unnecessary loss of time and money (2).
Manufacturers wanting to apply lean methodologies are taking a long hard look at their inventory path to see where it falls short. They walk an item’s path through the warehouse from entry to exit. They count the steps taken to receive, store, retrieve, and ship it. They follow its paperwork and account for the ease or difficulties warehouse workers face each time they move the item. They look for opportunities to automate services using pick-to-cart or other barcode-based technologies to simplify the workflow (3).
An organization that deploys its staff in the most effective manner experiences greater efficiency, thus earning both hours and dollars. Technologies that track the progress of stock can highlight patterns or trends that can identify even more opportunities to improve efficiency.
Transport of a physical product can never be eliminated, but limiting it to what is strictly necessary is an important goal of lean manufacturing (5). Regardless of whether raw materials are being shipped to the manufacturer or the finished product is being shipped to a customer, lean manufacturers always pay close attention to fleet efficiency.
Since transport costs can be dramatically affected by route choice or fleet fuel efficiency, organizations of all sizes now routinely employ fleet tracking software (3) to provide data regarding routes, driving efficiency and even the number of hours their employees spend driving the trucks. This data can assist them in making decisions regarding transportation efficiency and spot trends that they need to address.
In other cases, organizations will often select multiple shipping companies to ship goods quickly. Whilst this may seem to bring short-term benefits, they miss out on the opportunity to combine shipments or use the leverage of larger shipments to negotiate better transport deals.
Manufacturers will benefit from taking the time to study their supply chain for opportunities to employ lean manufacturing methodologies. Even small, logical adjustments can reduce wastage, therefore saving dollars, man-hours and even raw materials.