Businesses are bound to come under stress if they cannot cost-effectively utilize their assets. The role of supply chain management and the principles and tools covering it; for instance, Kaizen is to reduce the wastages in assets and improve their performance. Transportation is one of the critical and vital logistics support, which your factory needs for bringing out optimal output and delivery. We would cover in this article how Kaizen principles can go towards reducing transport cost in your business operations.
Kaizen principles advocate putting in place a continuous improvement system to improve the business processes of which transportation is an integral element within your factory. It follows the ‘Deming Cycle’ model, which consists of a sequence of the four repetitive steps to achieve continuous improvement and learning.
These four cycles are:
- Check (study)
The ‘Deming Cycle’ aims at accomplishing continuous improvement by repeating the above process after the consolidation of each phase. To determine whether the upgrades have been what they were intended to be, and it fits in well with the Kaizen Principles.
Kaizen facilitates the identification and removal of wastes in all the phases and enhances the efficiencies of the organizational performance by putting in place standardized tasks and processes. By misuse, we mean, it can be anything, wasted time, energy, inefficient movement of vehicles within your factory, which does not add value to a process. For instance, while making a value stream, you have to include forklift operations to unload raw material for inventory and transport. For production as it would add value in terms of better turnout of timing and result in quicker cycles in the movement of the materials.
Kaizen approach to transport management
Your factory can benefit by applying the Total Flow Management, (TFM), which is an approach in Kaizen that covers the entire supply chain of your factory. Using the TFM model, an ”internal pull-flow’ system is created by which the manufacturing pulled from the retail customers based on real demand in a continual manner. This approach made through forecasting of the market from the retail customers, which used for capacity planning.
The core objective of TFM is to reduce the ‘Lead Time’ in the supply chain. Reducing lead time goes towards eliminating the wastage of waiting, and the benefits you derive are:
- Reduction in costs
- The reduced requirement of working capital
- Improvement in quality
- Increase in productivity
- Higher levels of customer service and satisfaction
All of the above achieved by the creation of flow across the entire supply chain, wherein the starting point is customer consumption. It is so because in this case the production is driven by original orders or via the inventory replenishment process. The transport routes are designed physically by creating one at a timepiece- container,-pallet- flows respectively. To be able to accelerate the flow, it is needed, the redesigning of the transport routes done with high-frequency transport loops.
Transport or logistics costs form a large chunk of operating expenses. Better logistics and supply chain management is not just theoretical jugglery but the practical need for businesses to survive in a highly competitive environment. In this context, Kaizen principles provide time-tested solutions to reduce your transport costs. This article offers you the rationale as well as practical methods to achieve your organizational goals, which you need to apply aggressively.
Keywords: TRANSPORT, KAIZEN, COST, REDUCE, PRINCIPLE, Kaizen Principles, PROCESS, supply chain, IMPROVEMENT, FLOW