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Lean Logistics: What Does it Mean for Your Bottom Line?

Posted by Julie Wanstedt on 10/27/16 3:30 PM
Julie Wanstedt

Man writing terms - Supply Chain Management, Supplies, Procurement, Manufacture, Product, Inventory, Distribution, Logistic, Retail, Customer

Today’s business owners are tasked with competing in an increasingly more global market while ensuring materials are available and maintaining product inventory to meet customer demand without compromising cost or speed of products and services. Implementing lean logistics practices, or the reduction of waste from materials and products, order processing, employee time, and loss of sales throughout the supply chain, can mean crucial benefits to the bottom line of a business.

Where to begin?
Managing the logistics of any multinational business can be daunting and overwhelming as it is. So, while starting any sort of waste reduction or optimization process can be difficult, finding ways to make production more effective and efficient through lean logistics processes are becoming more common.

 One of the more important things to consider is that lean logistics isn’t just a short-term project. It must be an on-going shift in the way employees think and work - from the executive level on down. Upper level management buy in is critical as work flows down through the company’s departments. Thus, the first step in implementing any sort of lean activity is to align each corporate function and team with the overall goal.

 Implementing lean processes should also entail looking at the bigger picture. Businesses may find that something may seem to be saving money, actually costs more in the long run.

 The Impact

As lean processes are implemented and ingrained, businesses will begin to see improvements in their bottom lines. Those can include:

  • Quicker material flow
  • Improved customer service
  • Reduction of lead time, including process and shipping lead times, which can lead to a reduction in static inventory reduction
  • Overall extraneous activities of the supply chain can also be reduced
  • Greater profits; less supply chain inventory or extraneous processes can free up capital for other investments
  • Greater employee performance and morale through eliminating unnecessary activities

All of the above can mean other breakdowns in process can be exposed, leading to visibility to other areas of improvement. But, as an article in Inbound Logistics points out, “the value of lean concepts requires a more integrated approach, however, than simply enhancing visibility within a warehouse and reducing inventory. Companies must extend lean concepts outside the four walls to develop more effective and more reliable synergies with supply chain partners.”

Learn more about how Keller Logistics can help your company’s bottom line through our trucking, warehousing, freight solutions and packaging services.

Topics: Logistics

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