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LeanCor Logistics Webinar: How to Build Lean Logistics Route Plans for Network Stability

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Outdated and complex distribution network structures can contribute to over-sized inventory levels, unnecessary costs, a strain on service, and overly complex inventory deployment. Network-Optimization

In the second webinar of the Lean Logistics Series, learn how you can leverage lean principles to stabilize your logistics network.

We Will Explore:

• Market factors that are driving shippers to re-design their networks
• How dynamic and static routes can lead to lower total cost and optimal customer service
• The principles, processes, and tools that must be in place for success

Published in: Business
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LeanCor Logistics Webinar: How to Build Lean Logistics Route Plans for Network Stability

  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 Matthew Irwin Team Lead – Lean Logistics LeanCor Supply Chain Group mirwin@leancor.com Career Focus Areas: Nine years of experience in third party logistics with a focus on process/system improvements, analysis, reports and metrics for all supply chain related processes. Prior Roles: •Senior Logistics Analyst – Amstan Logistics •Master of Science in Logistics and Supply Chain – Wright State University
  4. 4. 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:
  5. 5. 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
  6. 6. Advancing the World’s Supply Chains Copyright © LeanCor 2015 A transportation route that is developed to run the exact same way hourly, daily, weekly, or monthly, to meet the demand of the parties involved. Are you currently using stable route plans? Example:  Monday – Pickup at Supplier 1 in Cincinnati, OH – 10:00 AM  Monday – Pickup at Supplier 2 in Louisville, KY – 1:00 PM  Thursday – Delivery at Customer in Houston, TX – 5:30 AM
  7. 7. Advancing the World’s Supply Chains Copyright © LeanCor 2015 The biggest value this adds to the supply chain is the consistency of the plan, taking the guess work out of the equation and increasing visibility for all parties.  The route picks up and delivers at the same day/time.  The same carrier can be used.  Can be applied to any type of route – LTL, TL, Parcel, and Intermodal.  Multiple suppliers/customers can be included to save on transportation spend.
  8. 8. Advancing the World’s Supply Chains Copyright © LeanCor 2015 •Revenue growth is more difficult to achieve, costs are increasing, and margins are shrinking •Changing customer requirements require an agile and dynamic supply chain that’s hard to manage •Shortages in carrier capacity and materials are driving excessive expedites and intercompany logistics. •Incremental and ad-hoc “quick fixes” have created a sub-optimized network lacking the right inventory, in the right distribution points, moved with the right transportation modes. •Carrier capacity constraints have pushed us to use spot markets rather then carrier partnerships increasing our transportation spend •Changes due to complexities in market, channel, supply networks, and distributed facilities has added difficulty to supply chain planning and decision making. Which of these challenges resonate in your business?
  9. 9. Advancing the World’s Supply Chains Copyright © LeanCor 2015
  10. 10. 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
  11. 11. Advancing the World’s Supply Chains Copyright © LeanCor 2015 The stable route plan is developed based on a number of factors to maximize efficiency and reduce the total logistics cost.  Mode selection – LTL, Truckload, Parcel, or Intermodal  Pickup/Delivery hours/days at all locations  Total route transit time  Past/future volume based weight or cubes  Carrier selection  Locations of pickups/deliveries  Cost of lanes via the different modes  Due dates Does your company currently use a route optimizer software?
  12. 12. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Customer Daily Requirements = x75 100 25 75 100 Day 5 75 100 25 75 75 757575 Day 1 Day 2 Day 5Day 3 Day 4 Order Lot Size = 25 Day 1 Day 3 Day 4Day 2 Order Lot Size = 50 What Happens Here? What are the Implementation Challenges?
  13. 13. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Fri1 /week Mon Tues Wed Thr 500 SQ/FT 4PM1 /day 8AM 10AM 12PM 2PM 100 SQ/FT 4PM8AM 10AM 12PM 2PM 25 SQ/FT 4 /day What is the effect on inventory? What is the obvious challenge?
  14. 14. Advancing the World’s Supply Chains Copyright © LeanCor 2015 7AM 9AM 11AM 1PM 3PM One Shift Material Handling Where can we use this concept tomorrow?
  15. 15. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Re-adjust our route plans on a daily basis to gain efficiencies Check adjust the plan  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
  16. 16. Advancing the World’s Supply Chains Copyright © LeanCor 2015 A redesign of the original plan may be needed if the following situations come up.  Volume has changed for all future shipments, either increased or decreased  New supplier/customer has been added to the network  Rates increased or decreased  Supplier/customer moved locations  Supplier/customer unable to meet demand  Holiday contingency planning  Planned promotions or seasonality What is the top reason you would adjust your static route plan?
  17. 17. Advancing the World’s Supply Chains Copyright © LeanCor 2015  Financial stability and predictability  Cost savings related to combined routing  Execution of plans is easier for all parties involved  Optimized material flow throughout Supply Chain  Increased pickup/delivery performance  Stronger relationships with carriers, suppliers, and customers
  18. 18. Advancing the World’s Supply Chains Copyright © LeanCor 2015
  19. 19. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Next Webinar: Supplier Development WED, July 1st | 11:00 – 12:00 EDT Registration Coming Soon on LeanCor.com!
  20. 20. Advancing the World’s Supply Chains Copyright © LeanCor 2015 Ashley Yentz ayentz@leancor.com 925.899.9725 Let’s connect on

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