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

Advancing the World’s Supply Chains Copyright © LeanCor 2015
1-Hour Webinar

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.

 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:

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

 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.

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

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

 Improvement Key:
Quality Sales DeliveryCost
Results in transportation network stability and
visibility, service quality, and overall cost reduction.

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

Poll:
Do you engineer
pre-determined,
repeatable route
plans for your IB
and OB networks?

 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

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

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

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

 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:

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

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/

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

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