“Lean Warehousing – From Paradox to Operational Excellence” is an interview with LeanCor Supply Chain Group CEO Robert Marchenko. Chapter three discusses the necessity and advantages of lean transportation and how business organizations deal with the building up and management of supply and delivery systems. The author of the article claims that many enterprises consider outsourcing in transportation to be the most reasonable decision. LeanCor offers its services as a third-party logistics firm. The company not only transports and stores its clients’ products, but also provides consulting and training for businesses’ personnel to maximize the prevention of waste, reduce associated expenses, and implement a problem-solving mindset, which is one of the valuable lean practices.
LeanCor’s CEO justifies the necessity of the existence of lean warehousing by exploring the realities of the lead time-transportation cost trade-off. Robert Martichenko states that the providers of delivery services are slower than their clients because the lead time requires an agile connection between the logistics company and the supplier, as well as prediction of the demand from the clients. Therefore, the practice of lean warehousing helps to reduce time-transportation costs by keeping the products in storage facilities.
Warehousing is linked to inventory costs. To increase the efficiency of the business, LeanCor has implemented the kind of lean practices that reduce lot size and inventory transportation expenses. For example, the company has a “Plan for Every Product,” which assists in the evaluation of customers’ goals as well as planning for storage and transportation. Other implementations of lean practices include quality control and the establishment of a flow basis, which operates in the areas of information, material flow, and inventory efficiency.
Maximizing People Systems in A Lean Transformation
For the business organization, people are crucial during the process of lean transformation. Their behavior should be lined up with the lean strategy of the company’s development. The role of HR in the transition of the organization to efficiency lies in the areas of searching and selecting employees who are team-oriented problem-solvers, motivating people through incentive programs, providing training for staff and managers to help them to develop as lean coaches, and outlining the key proficiencies that have to be cultivated in the organization. In other words, HR has to be involved from the very beginning during the process of lean transformation.
Other methods that can help to execute lean practices may include team support and the exploration of personal strengths and weaknesses; thus, the team members complement each other.
What Goes Around Comes Around
The manufacturing organizations that have a closed-loop logistical system would use returnable containers to deliver their products. As discussed in Chapter ten, the companies that benefit from the application of returnable containers are represented in the pharmaceuticals and publishing industries. The manufacturers that operate in the chemical industry and food production sector, along with the automotive business, employ the reusable container system, as well.
The returnable totes have not only practical benefits but also financial advantages. The cost benefits are usually assessed by the financial payback approach. The crucial advantages that the reusable container system can offer are associated with the removal of costs related to corrugated containers. Among other benefits that can incline businesses to invest in a returnable container system is the reduction of damages during transportation, more efficient cube utilization since the reusable totes can be safely put on each other, and therefore, fewer cargo deliveries.
Lessons Learned
The author outlines six lessons that have been learned during the implementation of the lean automated meter readers (AMRs) project by PPL Electric Utilities. The first lesson considers the contemplation of the project as a whole. The second deals with the management of the professionals in teams and supplying them with the necessary resources. PPL EU’s leadership built up a multi-functional team with experts in various fields. The understanding of the benefits is emphasized in the third lesson. The reward from the execution of the AMRs went beyond the cost reduction associated with the manual meter readers (MMRs).
The fourth lesson demonstrates how to manage labor who had been displaced or outsourced. The well-developed communication among the participants involved in the project implementation illustrates the fifth lesson. The assessment of the lean execution as a beneficial step for efficient progress is the basis for the sixth lesson. While keeping in mind the improvement of accuracy and customer service, as well as a reduction in costs linked with the MMRs, the company applied the lean principles that led to financial and service-related benefits and reduction of other expenses.
The acknowledgment of the lean initiatives and their positive influence on company performance and on the building up of a perfectly tuned team, along with the assessment and administration of the project from the very beginning to the final implementation, are the most valuable lessons learned in this process. Each of these factors demonstrates the profound understanding of the processes that the company goes through during the transformation, as well as the necessity of the transformation itself.
As a part of the lean application, these lessons can be successfully applied by most companies, as well as my place of employment, because they display the advantages that lean transformation brings to a business enterprise.