Every year, manufacturers seek new ways to trim the fat out of their operations. In most cases, this is because the business has excessive or redundant programs. Programs that do nothing but waste money, reduce business efficiency in some way, or ultimately lead to lost revenue.
These cost-cutting ventures are what we call lean manufacturing principles. While this term is often associated with the manufacturing industry specifically, lean manufacturing is an operational philosophy that is applied throughout the logistics industry in various ways. The primary objective behind this principle is to discover ways not necessarily to eliminate waste, but rather to minimize the potential of waste.
And it all must be done in such a way as to not jeopardize the ability to fulfill customer orders.
When applied correctly, lean manufacturing principles can improve many areas of your business. It leads to increased productivity, reduced wasteful spending, increased annual profitability, and establishes more sustainable eco-friendly processes.
In today's blog, we will explain the core principles involved with the lean manufacturing philosophy. We will also introduce the four leading areas within any supply chain operation that can be enhanced by implementing lean manufacturing strategies!
What is Lean Manufacturing?
The intent of lean manufacturing is to continually strive to minimize wasted resources within a business.
Whether you operate a restaurant or manage a fulfillment warehouse, every business has areas that can be fine-tuned for improved efficiency. Initially, lean manufacturing principles applied exclusively to the manufacturing business.
However, as the concept became more and more popular, supply chains began to implement the strategy, as well. It has since become somewhat of a mainstream process and almost a standard of sorts.
While every industry has different operational processes, there are four areas of focus that they all can agree on...
In order to sell a product to a consumer, you must first maintain an inventory level.
Keeping your inventory control optimized is incredibly difficult, especially for businesses who deal with peaks and valleys of annual sales. But by properly managing your inventory, you can easily eliminate a lot of waste. A product that sits in a warehouse for an extended period of time is not profitable. It takes up valuable real estate space on the shelf and could be replaced with something that sales better.
This is the very definition of waste! Look at and compare month-to-month sales numbers and then go through your inventory, getting rid of everything out that you are paying to simply take up space. Oh, and then, don't order more of the same product unless you really just want to throw more money away!
Ask any fulfillment or warehouse facility that ships products to consumers on a daily basis what their leading cause of wasteful spending is. We are willing to be that you will likely hear “too many hands involved in the process”.
Finding ways to reduce movement of products is another critical component within the lean manufacturing principle. With every pallet or package moved comes more hours on the payroll, equipment rental fees, and the potential for injury. The latter also leads to money spent on things that could have been avoided.
This philosophy is also used or best described with e-commerce sales shipped directly from the manufacturer to the consumer. By cutting through distributors, or secondary retail operations, markups are eliminated, customers receive products quicker, and usually all for a lower price.
The ways and methods of transporting products through the supply chain is another critical aspect of lean manufacturing.
Proactive shippers are discovering more efficient and cost-effective methods of shipping directly to customers, with improved delivery time, and better notifications. More importantly, many of them are moving toward more eco-friendly carriers, which usually also means one more step in the direction of implementing circular supply chains. Additionally, they utilize advanced software programs and communication portals to provide valuable insights into package movement to consumers via their communication platform of choice.
In the end, each of these items helps to eliminate wasteful spending.
The final principle within the lean manufacturing philosophy is time.
Finding areas of wasted time in any business operation can help a business make significant changes to its operational efficiency. More time means more hands-on-deck and more checks to cut!
However, cutting time out of the business operation is counterproductive when it reduces quality or safety. The reduction or fine-tuning of time is arguably the most difficult principle to master within a lean manufacturing system.
Implementation of a lean manufacturing philosophy begins by working with experts in this industry. Whether you operate a fleet of trucks, manufacturing facility, or fulfillment center, an experienced professional like Redwood Logistics has got your back. We can help you discover areas of opportunity, without compromising your daily operations or your ability to fulfill to your customers.
Reach out to us today and let's talk about how you can implement lean manufacturing principles to your business!