E-grāmata: Lean Transportation Management: Using Logistics as a Strategic Differentiator [Taylor & Francis e-book]

This book provides an overview of the key transportation management processes from a shipper’s perspective. It enables managers to get a quick insight in the added value of transportation as a strategic differentiator, its key drivers, and guidelines on how to use them in an effective and efficient decision-making process. It explains how to identify and eliminate waste using basic Lean tools and proven concepts. The reader is instructed how to start implementing the Lean methodology and best practices in the industry to realize significant savings.

It starts with explaining the 14 Toyota principles and Lean culture. As Lean leadership plays a crucial role in implementing and creating a Lean culture, it is equipped with change management guidelines. The Lean methodology offers sufficient tools to get started: Hoshin Kanri, Kaizen, Value Stream Mapping, Standard Work, and 5S. After explaining the key transportation management processes, the reader is guided through an action plan to start, maintain, and build on change. In Lean philosophy, transportation is traditionally considered to be waste -- it is usually a cost center that puts time and money between the vendor and customer. The primary goal is to reach customers around the world fast and without big investments. As it is the link between the supply chain processes and partners, transportaion can be considered as an important service differentiator to create a strong competitive advantage.

Companies such as Adidas and Amazon are using transportation to increase sales by delivering purchased products faster than competition. These companies do not treat transportation as a cost center. They are not focusing on transportation spend reduction. They allow customers to buy any product that is available in any store or warehouse, to be delivered at home or any other address such as a store or any other pick-up point. By delivering faster than competition, they are able to increase sales. At the same time, they lower their total supply chain costs as faster deliveries lead to fewer returns. Reduction of returns means higher sales and lower transportation costs for returns. The result is higher profits, while creating more value for the customer.

Transportation is moving from a cost center towards a profit center. Amazon is a good example of an innovative company working on breakthrough transportation solutions. The traditional logistics service providers are perceived to not innovate fast enough. Top management must understand the transportation management basics and use it in their strategic decision-making. They should be involved in discussions how to organize the transport management function in the best way and how to use it as a service differentiator. Transportation is more than only the efficient move of supplies, sub-assemblies and final products. In addition, it is amore than the key performance indicators on the business-balanced scorecard. Transportation management professionals fail to catch top management’s attention due to the use of technical language. It is more difficult to understand transportation key performance indicators such as loading degree, net and gross pick-up and delivery reliability. It is easier to get top management attention when talking about lost sales due to stock-outs, lost tenders due to long delivery times, high inventory holding and scrap costs.

Transportation processes and business environment are becoming that complex that working only on the management priorities is not good enough to survive. Due to global sourcing and marketing, both costs and transit-times increase while inventory levels decrease and create additional challenges for the transportation function. In addition, the booming e-commerce and mass customization require transportation to be agile in complex solution designs and advanced tools usage. This puts also a pressure on the transportation branch to hire better-educated employees who can handle the additional complexities.

The intention of this book is not to provide an in-depth description of each transportation process, but rather an overview of the processes in the transportation management scope. This book captures an experienced shipper’s view to provide managers insight in the added value of transportation as a strategic differentiator, its key drivers, and how to use it in an effective (doing the right things) and efficient (doing the things right) decision-making process.