Reducing cost, time and inventory is the objective of almost every supply chain management system and logistics company. Competitive environment intermittently changes the way we run our business and challenges us for periodical improvement. Adaptation of scientifically proven techniques and methods helps to keep us on par with the fast moving industry. The retort to constantly achieve this and improve the logistics operations is the implementation of Lean Logistics.
What is Lean Logistics?
Lean logistics is the optimisation of the supply chain management system with the primary goal of eliminating wasted resources. It upsurges the flexibility of the supply process and logistics channels. In simple terms, lean logistics is the application of lean management in the field of logistics and supply chain. The lean concept involves a continuous approach of seeking zero defect and achieving maximum productivity by eliminating waste at every step of the process.
What is the importance of Lean Logistics?
In logistics, the primary waste is inventory. The application of lean concept in Logistics mainly targets reduction of inventory waste. Lean logistics aims to achieve the same in the following ways:
- Reducing the products held in inventory waiting to be delivered.
- Minimising the movement of products during manufacturing and delivery.
- Decreasing the amount of transportation involved in movement of the products.
- Working towards reducing defects and breakdowns to avoid re-work.
- Calculate risks well in advance.
- Identify non value adding activities in the process.
- Assess for process gaps and develop ways for process improvement.
- Incorporate technology towards process development and waste elimination.
The application of lean technique in logistics benefits the entire organisation because it creates a standard working procedure and follows the best practices in the operations. It regularly monitors the ongoing work procedure to chalk out scopes for further development. It also forecasts the errors that may crop up in the future and works towards eliminating the same well in advance. Lean logistics ensures that the process does not stop at any point and the entire transaction is carried out in a smooth and uninterrupted manner.
Many activities which do not add value to the logistics process can be eliminated by the introduction of lean methodology. Companies become efficient, have greater accountability, reduce delivery time and cost and achieve higher milestones of achievement. The use of lean technology has been observed to save cost, reduce risks and improve performance ranging from 10% – 40% for any organisation. In the long run, organisations can benefit on a large scale through continuous development and enhancement.
Delivering the products to the end customers at the right place and at the right time in the appropriate quantity and with the best of quality is the goal of every supply chain industry. Implementing the concept of lean technology in the field of logistics and supply chain ensures that the end customers do not have to pay for the wasted resources and system inefficiency. It develops long term value among customers and increases business performance in the long run.
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