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My Introspective

by Laurus Nobilis
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Supply Chain

Lean Principles in Logistics (I)

Lean Logistics

 

Lean Concept gives the opportunity to the company to increase the service level, while reducing the cost. This is possible through strict implementation of lean tools.

 

Posted: Aug 2012


 

LEAN concept provides a fundamentally different way of looking at operations of company. The aim of LEAN principle in logistic is to reduce the cost base and increase service levels to the customer by eliminating non-value added activities.

The lean principles are executed by conducting systematical implementation of different lean tools.

 

Conceptual differentiation

There is fundamental difference between lean and non lean company.

  1. Lean company` focus on: Eliminate waste in all platforms

  2. Non-lean company` focus on: Mass production, volume generated efficiencies

As it is obvious the strategy of lean and non lean companies is obvious. Lean companies are focused on elimination of all unnecessary elements of the processes ( process steps, time waste, resource waste ). On the other hand, non-lean companies relies more on the economy of scale, which can bring the saving per unit, based on huge production runs.

The Toyota is the example of the company that conducted implementation of lean concept. In 1990, Lean Toyota was half the size of Non-Lean General Motors. Today Toyota is passing GM as the world's largest auto maker and is the most consistently successful global enterprise of the past twenty. Its dominant success in everything from rising sales and market shares in every global market, not to mention a clear lead in hybrid technology, stands as the strongest proof of the power of lean enterprise.

 

5 Basic Lean Principles

Five basic principles that characterize a lean enterprise are:

Lean Principles in Logistics

 

  1. Specify value from the standpoint of the end customer by product family

  2. Identify all the steps in the value stream for each product family, eliminating every step and every action and every practice that does not create value

  3. Make the remaining value-creating steps occur in a tight and integrated sequence so the product will flow smoothly toward the customer

  4. As flow is introduced, let customers pull value from the next upstream activity

  5. As these steps lead to greater transparency, enabling managers and teams to eliminate further waste, pursue perfection through continuous improvement

 

Read More on Lean Logistics:

Lean Principles in Logistics
Value/Waste Management in Logistics
Logistic Value Streams
Value Creating Step Flows
Pull Logistics
Perfection in Logistics

 

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