Building a lean supply chain is the current number one tasks for operations and logistics managers. It is an issue of adapting to survive in a changed world. It is a world where business – both at B2C and B2B level – is done mostly online. And the key requirements for the online (ecommerce) business models are speed and simplicity.
What Is a Lean Supply Chain and How Does It Work?
Lean manufacturing and management rely on 7 core principles:
- Eliminate waste
- Build-in quality
- Create knowledge
- Defer commitment
- Deliver fast
- Respect people
- Optimize the whole.
These are principles that define an ideal supply chain. Thus, we may argue that a lean supply chain is the goal towards all businesses in the interconnected global trade must reach. The global pandemic that disrupted our lives was, basically, the proverbial kick needed to push things forward.
Taking into account the principles above, Logistic Packaging specialists see the lean supply chain as an ecosystem where all the stakeholders are always on the same page. Information is transmitted, as far as possible, in real time. Decisions concerning packaging, shipping, storage and handling are aiming to reduce waste, dwelling time and optimize costs. Finally, the merchandize is reaching the end consumer as fast as possible to satisfy demand and take into account the special requirements of cold chain and food safety standards.
How Can You Transform Your Systems into a Lean Supply Chain?
Of course, there is no magic formula, no one-size-fits all recipe for every business in every industry. What we propose here is to share a few helpful guidelines to get the process started.
Thus, to build a lean supply chain you should consider the following:
1. Identify and Reduce Loss throughout the Supply Chain
A lean supply chain generates a minimum (ideally, zero) amount of waste. The concept of waste covers several aspects, such as:
- Single use packaging;
- Damaged goods that cannot be repaired and resold;
- Unusable or unsuitable raw materials, parts and components;
- Unnecessary manual labor.
This is why Logistic Packaging experts advocate for the total replacement of unreliable wooden and cardboard boxes and crates with returnable plastic packaging materials. At the same time, we advocate for the large-scale adoption of automation and using logistic equipment for material handling instead of human labor.
2. Set KPIs and Measure Them Continually
How do you know if you are getting closer to a lean supply chain? You need key performance indicators (KPIs), such as reduced factory to store time, cost optimization percentages and number of steps required to handle and deliver goods.
Without them, you will never know whether you are progressing on the path of transformation or stagnating at an unsatisfactory plateau.
3. Reduce Idle Times
Idle times stretch the supply chain and make it less efficient. They are caused by various factors: inadequate logistics infrastructure in the warehouse, inadequate packaging materials and inefficient truck loading.
Reusable packaging materials are designed to speed up the supply chain. They have standard sizes so you can plan ahead the usage of warehouse storage space as well as truck loading. They are designed to facilitate handling by logistic vehicles and equipment, such as forklift trucks, pallet inverters and pallet box discharging systems.
At the same time, professional plastic packages are easy to clean and, thus, they will be returned faster for a new cycle of use.
4. Incorporate Technology in Your Supply Chain Processes
QR codes, RFID labels and other similar technologies help companies monitor the movement of their goods in real time. Online training courses teach best practices to employees and help them adopt the new safety rules enforced by corporate management.
These are just two simple examples of how technology helps companies build their lean supply chain. Another example is working with a professional packaging provider. We use technology and know-how to recommend the best packaging solutions for your business, or even design custom packages to fit your specific needs.
5. Optimize Total Cost of Ownership
Total cost of ownership (TCO) has a powerful impact on your supply chain. The more you spend for the items and equipment needed to produce, store and ship your products, the more you need to increase your prices. And this can lead to lower sales as competition takes over your market share.
One way to reduce TCO is to implement reusable packaging materials. They are reliable, with a strong build and designed to withstand intense use over a long lifespan. This means that you will not have to spend money for repairing or replacing these products on a frequent basis. Thus, your overall TCO for these items is lower.