Lean Transportation Management: Using Logistics as a Strategic Differentiator

Description

This book provides an overview of the key transportation management processes from a shipper’s perspective. It enables managers to gain 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 guided on how to start implementing the Lean methodology and best practices in the industry to realize significant savings. Companies such as Adidas and Amazon are using transportation to increase sales by delivering purchased products faster than the competition. These companies do not treat transportation as a cost center. They are not focusing on reducing transportation spending. They allow customers to buy any product that is available in any store or warehouse and have it delivered to their homes. By delivering faster than the competition, they 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. 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 on how to organize the transport management function in the best way and how to use it as a service differentiator. Transportation is more than the efficient movement of supplies, sub-assemblies and final products. In addition, it is more 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. Cover......Page 1 Half Title......Page 2 Title Page......Page 4 Copyright Page......Page 5 Dedication......Page 6 Table of Contents......Page 8 List of Figures......Page 14 List of Tables......Page 16 Introduction......Page 18 About the Author......Page 22 Chapter 1: Lean......Page 24 1.1.1 Voice of the Customer......Page 25 1.1.2 Voice of the Employee......Page 27 1.2 Lean Thinking......Page 28 1.4 Lean Culture......Page 31 1.5 Lean Leadership......Page 32 1.6 Lean Tools......Page 34 1.6.1 Breakthrough Improvement......Page 35 1.6.2 Continuous Improvement......Page 37 1.6.3 Kaizen......Page 40 1.6.4 Value Stream Mapping......Page 44 1.6.5 Daily Management......Page 48 1.6.6 Problem Solving......Page 51 1.6.7 Standard Work......Page 55 1.6.8 5S......Page 59 1.7 Lean Maturity......Page 61 Chapter 2: Transportation......Page 64 2.1 Location and Flow Types......Page 67 2.2 Outbound Process......Page 70 2.4 Shipment Preparation......Page 73 2.5 Transportation Modalities......Page 77 2.5.1 Parcel and Express......Page 79 2.5.2 Airfreight......Page 84 2.5.3 Road Transportation......Page 95 2.5.4 Sea Freight......Page 100 2.5.5 Train......Page 106 2.5.6 Intermodal......Page 107 2.5.7 Overview......Page 108 2.6 Costs and Transit-Times......Page 109 2.7 Incoterms® Rules......Page 111 2.8 Trade Compliance......Page 114 2.8.1 Documentation......Page 115 2.8.2 Customs Clearance......Page 118 2.8.3 Supply Chain Security......Page 120 2.8.4 Dangerous Goods......Page 122 2.8.5 Embargoed and Sanctioned Countries......Page 124 2.9 Total Cost of Ownership......Page 125 2.9.1 Cost and Budgetary Control......Page 127 2.9.2 Freight Payment and Auditing......Page 132 2.9.3 Spend Analysis......Page 134 3.1 Commodity Strategy......Page 136 3.1.2 Conduct Market Intelligence Research on Suppliers......Page 138 3.1.3 Strategy Development......Page 140 3.1.5 Supplier Relationship Management......Page 143 3.2 Carrier Selection Process......Page 144 3.3 Carrier Review Process......Page 159 3.4 Complaint and Claim Handling......Page 169 3.5 Network Optimization......Page 171 3.6 Benchmarking......Page 173 3.7 Outsourcing......Page 174 3.8 Sustainability......Page 178 3.9 Quality Management System......Page 179 3.10 Transportation Management System......Page 182 3.10.1 Master Data Management......Page 184 3.10.5 Order Consolidation......Page 185 3.10.8 Supply Chain Visibility......Page 186 3.10.9 Proactive Shipment Monitoring......Page 188 3.10.10 Customer Service......Page 189 3.10.11 FPA......Page 190 3.10.14 Reporting......Page 191 3.10.18 EDI and Interfacing......Page 192 3.11 Transportation Management Maturity......Page 194 3.11.1 Category Strategy Development......Page 195 3.11.3 Supplier Quality Management......Page 196 3.11.4 Supplier Management and Development......Page 197 3.11.6 Human Resources......Page 198 3.11.10 Transportation Strategy......Page 199 3.12 Market Trends......Page 202 3.12.3 Increasing Supply Chain Complexity......Page 203 3.12.5 Omni-Channel Business Models......Page 206 3.12.9 Crowd Funding......Page 207 3.12.13 Big Data/Open Data......Page 208 3.12.15 3D Printing......Page 209 3.12.17 Internet of Things, Cloud Computing and Industry 4.0......Page 210 3.12.20 Resource and Energy Limitations......Page 211 3.12.23 Safety......Page 212 3.13 Risk Management......Page 213 Chapter 4: Lean Transportation Management......Page 216 4.1 Prepare for the Change......Page 219 4.2.1 Lean Leadership......Page 223 4.2.2 Lean Value Stream Manager Transportation......Page 224 4.2.3 Lean Value Stream Organization Chart Transportation......Page 225 4.2.4 Lean Metrics......Page 226 4.3 Transportation House of Lean......Page 228 4.4 Reduce Waste: Lean Customer......Page 231 4.4.2 Collaborate with the Customer......Page 232 4.4.3 Pack Properly and Prevent Damages and Losses......Page 234 4.4.4 Improve Visibility......Page 235 4.4.6 Reduce Transit Times and Their Variances......Page 236 4.4.8 Other......Page 237 4.5 Reduce Waste: Lean Finance......Page 239 4.5.1 Consider Modal Shifts......Page 240 4.5.3 Set Up Tender Roadmaps......Page 241 4.5.5 Leverage Purchasing Volumes......Page 242 4.5.7 Apply a TCO Tool......Page 243 4.5.10 Check the New Silk Route......Page 244 4.5.11 Other......Page 245 4.6 Reduce Waste: Lean Processes......Page 249 4.6.1 Consider in- and Outsourcing......Page 250 4.6.2 Implement Daily Performance Reporting and ProActive Exceptions Monitoring......Page 251 4.6.3 Level Out Demand......Page 252 4.6.4 Limit and Manage Returns......Page 253 4.6.5 Optimize Vendor Inbounds......Page 254 4.6.6 Implement Smart and Re-Useable Packing Material......Page 255 4.6.8 Other......Page 256 4.7 Reduce Waste: Lean It......Page 259 4.7.1 Consider a TMS......Page 260 4.7.2 Use a Dynamic Carrier Choice System......Page 261 4.7.3 Automate and Digitalize More......Page 262 4.7.4 Consider a Yard Management System......Page 263 4.7.6 Other......Page 264 4.8.1 Hire Qualified Employees......Page 265 4.8.2 Develop and Co-Operate with Carriers......Page 267 4.8.3 Standardize Processes......Page 268 4.8.6 Other......Page 269 4.9.1 Sign a Carrier Quality Agreement......Page 271 4.9.3 Manage Transportation Risks......Page 272 4.9.5 Reduce the Carbon Footprint......Page 273 4.9.8 Act with Integrity, Honestly, Ethically, and Support Fair Trade......Page 274 Abbreviations......Page 276 Further Reading......Page 282 Index......Page 284