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LeanCor Logistics Webinar: 5 Critical Components of a Lean Logistics Strategy

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Is your logistics strategy achieving the levels of control and stability necessary to deliver on customer expectations? Are your logistics processes designed for daily visibility, waste reduction, and supply chain collaboration? In this first webinar of the Lean Logistics Series, learn the critical components of a lean logistics operational strategy that will position your company for competitive advantage.

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LeanCor Logistics Webinar: 5 Critical Components of a Lean Logistics Strategy

  1. 1. Advancing the World’s Supply Chains Copyright © LeanCor 2015 1-Hour Webinar
  2. 2. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Ashley Yentz Director, Account Management LeanCor Supply Chain Group ayentz@leancor.com Career Focus Areas: Entire career committed to lean logistics – specifically customer account management, change management, KPI creation, lean leadership, network design, standard work and operating procedures Skilled in coaching organizations through their lean logistics implementation: strategy deployment, culture change, process standardization Prior Roles: •Kaizen Leader, Strategic Planning - Toyota Motor Sales U.S.A. •Continuous Improvement Leader - Toyota’s Parts Operation Supply Chain •Transportation Analyst - Hilti, Inc.
  3. 3. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Lean, supply chain, six sigma, and leadership courses that develop people capability and problem solving skills while building a culture of operational excellence.  Project-based, end-to- end supply chain solutions that improve your processes, reduce inventory and Total Cost, and optimize your network.  Custom, outsourced transportation management and warehousing solutions that optimize material flow, and exceed your business goals. Trusted supply chain partner that specializes in lean principles to deliver operational improvement. Three divisions:
  4. 4. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Custom, outsourced transportation management and warehousing solutions that optimize material flow and exceed your business goals Transportation Management Dedicated Warehousing and Distribution Web-Based TMS
  5. 5. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Total Cost of Fulfillment: Build models and lead and make decisions based on Total Cost of Fulfillment.  Recognize that all decisions have unintended consequences and as leaders we must become systems thinkers.
  6. 6. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Visibility Make customer consumption visible throughout the supply chain and manufacturer or distribute to the pace of consumption Lead Time Reduce lead time to get closer to the customer to reduce reliance on forecasting and to enable pull to reduce inventory Flow Level flow of all logistics activities over the entire value stream to reduce variation and enable stability Pull Use pull systems where consumption drives replenishment to reduce complexity and over production Velocity Increase velocity by focusing on smaller batches more frequent deliveries in all processes to drive flexibility to meet customer demand Problem Solve Collaborate, build teams, solve problems and focus on process discipline across the extended value stream Total Cost of Fulfillment Lead and make decisions based on Total Cost of Fulfillment recognizing that all decisions have unintended consequences Guiding Principles of Lean
  7. 7. Advancing the World’s Supply Chains Copyright © LeanCor 2015 A) Low visibility to supply chain activities B) Managing multiple suppliers, customers, and third parties C) High variability in materials and transportation D) High variability in supplier and carrier performance E) Unavailable data for decision making
  8. 8. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Improvement Key: Quality Sales DeliveryCost Results in transportation network stability and visibility, service quality, and overall cost reduction.
  9. 9. Advancing the World’s Supply Chains Copyright © LeanCor 2015 A TMS must easily integrates with our other systems  Provides visibility to data in real- time for proactive problem solving  Find value in your transportation  Opportunity to ensure optimal routing in terms of customer business rules and service (i.e. transportation cost)  Connects transportation to manufacturing and inventory strategy
  10. 10. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Poll: Do you engineer pre-determined, repeatable route plans for your IB and OB networks?
  11. 11. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Central database of all critical information required to make business decisions relative to manufactured or purchased parts used in a manufacturing facility.  Pull systems: connects the manufacturing facility (consumption) through replenishment (purchasing) to the supplier upstream Height LengthWidth Part Data (Dimensions) Height LengthWidth Pallet Data  Data elements include consumption, packaging, inventory management, material handling and planning, transportation, and supplier information  Core benefits include effective line-side delivery, reductions in lead time and Total Logistics Cost, and improvements in pipeline visibility, first time quality, and supplier fill rates
  12. 12. Advancing the World’s Supply Chains Copyright © LeanCor 2015 3) Re-adjust our route plans on a daily basis to gain efficiencies Check adjust the plan Dynamic Routing Tools  Dynamic mode and route optimization – balances cost and stability  Incremental improvements  Can leverage data (history of changes made) to continuously improve upon the static route plan
  13. 13. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Our Transportation Management System (TMS) can notify us of an incomplete shipment and available recovery options before delivery  Shortage Recovery and Unplanned Order Process  Time to react is critical to reducing and avoiding cost.  Systems like LeanCor’s Orloe Toolkit can proactively notify you and your stakeholders when events within the supply chain happen.  Such situations can include: • An order quantity has been revised • Route instructions have been released • A discrepancy between your order quantity and the supplier's ship quantity has occurred • The supplier has failed to enter a ship quantity or the quantity recorded was zero
  14. 14. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Our TMS facilitates real-time, exceptions-based communication. Track & Trace Exceptions Monitor  Lean Delivery Management System:  Provides appropriate level of visibility for each shipment  By understanding trends, predicts and manages delays before they become problems
  15. 15. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Purpose: ◦ Create metrics that add value to monitoring and improving processes.  Outcomes: ◦ Identify key metrics that can be collected to monitor performance and identify gaps. ◦ Establish key targets for metrics that maintain, promote, or make visible instability or stability. ◦ Define purpose for each metric, that purpose should drive action. On-Time Pickup and Delivery: Cost impact: prevents overtime on loading/shipping docks, increases customer satisfaction and prevents line-down scenarios, stability in this metric leads to reduced inventory Pickup/Delivery Frequency: Cost impact: can lead to increased logistics cost, must be paired with decreases in inventory Trailer Utilization: Cost impact: full trucks lead to fewer trucks, reduces transportation cost Examples:
  16. 16. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Measure trailer cube utilization and perform trailer audits Part # Supplier Name Avg. Daily Usage Parts per Container Length (IN) / Container Width (IN) / Container Depth (IN) / Container Cubic Inches used per day Cubic Feet ("1728") Cubic Yards/Day ("27") 111 Supplier 1 2500 5 24 20 12 2880000 1666.67 61.73 222 Supplier 1 64000 1000 12 10 12 92160 53.33 1.98 333 Supplier 1 64000 1000 12 10 12 92160 53.33 1.98 444 Supplier 1 1500 25 24 20 12 345600 200.00 7.41 TOTAL 73.09 555 Supplier 2 3200 1 12 10 12 4608000 2666.67 98.77 666 Supplier 2 3500 20 16 20 24 1344000 777.78 28.81 777 Supplier 2 3000 50 24 20 12 345600 200.00 7.41 888 Supplier 2 7500 10 12 10 12 1080000 625.00 23.15 999 Supplier 2 5500 25 16 20 24 1689600 977.78 36.21 TOTAL 194.34 Route Total 267.43 Liquid Cube = 52.5 feet long x 98.5 inches wide x 110 inches high Design Cube 137.73 = 52.5 feet long x 8.2 feet wide x 9.17 feet high = 3948 Cubic Feet Frequency 1.94 = 3948 Cubic Feet / 27 = 146.21 Cubic Yards Design Cube = 52.5 feet long x 98 inches wide x 104 inches high = 52.5 feet long x 8.17 feet wide x 8.67 feet high = 3719 Cubic Feet = 3719 Cubic Feet / 27 = 137.73 Cubic Yards Trailer Utilization Supplier File + Order File + Packaging File = Route
  17. 17. Advancing the World’s Supply Chains Copyright © LeanCor 2015
  18. 18. Advancing the World’s Supply Chains Copyright © LeanCor 2015
  19. 19. Advancing the World’s Supply Chains Copyright © LeanCor 2015
  20. 20. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Next Webinar: How to Build Lean Logistics Route Plans for Network Stability TUES, May 26 | 11:00 – 12:00 EDT Register Now! http://www.leancor.com/event/how-to- build-lean-logistics-route-plans-for-network- stability/

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