In one of my favorite texts it is specified that the definition of Lean Logistics can have 2 meanings:
1. The application of Lean Thinking to improve logistics and operations. Most commonly it is the change of what it takes to switch from a traditional logistics to a logistics more in support of Lean manufacturing.
2. Lean Logistics as an implementation of the Milk Run and Waterspider concepts.
I now come in more detail.
Lean Logistics Definition 1 – Reduce the 7 Waste of Logistics
As the two words Lean + Logistics suggests, the concept is to apply Lean Thinking to logistics.
We define logistics as the set of goods and services that are necessary to bring an asset from point A to point B.
Typically the logistics process is divided into 3 parts:
- Inbound Logistics – Logistics from suppliers to the production plant
- Internal Logistics – Logistics from internal warehouses to production
- Outbound Logistics – Logistics from the production plant to the end customer.
The 7 Wastes of Logistics
1 – Complexity of Systems
Elaborate scheduling systems and managers who work on the differences in normal scheduling and current needs.
2 – Lead Time
Too long from one step to the other of the process.
3 – Transportation
An excessive path between the facilities, the plant, and the suppliers.
4 – Space
All the square meters that are used to accumulate inventory are wasteful.
5 – Inventory
All inventory at distribution points is wasteful.
6 – Human effort
All the people who are involved in the logistics process who do re-working, confusion and excess movement.
7 – Packaging
An incorrect type of asset in the wrong quantity can create damage and excessive inventory. In addition, the packaging itself with its cost, the time to open and close it, can be a source of waste.
As you can see there are many similarities with the 7 wastes of production.
My Reference Book for Lean Logistics
My favorite book when I have to talk about Lean Logistics is:
Building a Lean Fulfillment Stream.
The tagline of this book is:
“Rethinking the supply chain and logistics to create maximum value at minimum total cost”
In this book, the principles of Lean Logistics and the steps on how to achieve it are given.
- Eliminate all waste in the flow so that only valuable transactions remain.
- Make customer consumption visible to all members of the logistics process.
- Reduce Lead Time.
- Create a smooth flow.
- Use pull systems.
- improve speed and reduce variation.
- Collaborate and use standard and disciplined processes.
- Focus on the total cost of fulfillment.
Lean Logistics Definition 2 – Milk Run and Waterspider
Let’s now explain a little better the second interpretation of the definition of logistics focused on the Milk Run and the WaterSpider.
the concept of Milk Run which is widely applied in many industries and is based on the idea that a vehicle travels frequently according to a standard route that ends up in the Plant where it must bring the materials.
The concept is that in the standard route, the means of transport visit several suppliers in a 1 circuit.
In each circuit, the means of transport takes a small batch of many parts from a supplier in a certain discharge window, typically half an hour.
The milk-run can also be used in distribution.
The Milk Run is similar to the concept of Water Spider that is normally used inside a Plant.
The figure of the water Spider inside the Plant is described in an excellent way in this video that I report below.
Video – Waterspider and Lean Logistics.
The WaterSpider and the Milk-Run are now proven ways to reduce and boost demand and bull-whip effect. They are methods that encourage continuous flow between all members of the supply chain.
In other words, the Water Spider is the internal drumbeat while the Milk Run is the external drumbeat.
The Waterspider and the Milk Run, if well implemented, can help to bring out the problems through a structured Problem Solving process.
Understanding What Lean Logistics Is Through Some Examples
In this section, I have collected some videos that can make us understand through examples What is the definition of Logistics.
- A real example of Lean Logistics in Volvo.
- Inbound Lean Logistics @ Amazon.
- Internal Lean Logistics @ Amazon.
- Lean Logistics into the Packing.
- Lean Logistics @ Alibaba.
- Augmented Reality in Lean Logistics.
- A complete example of a Lean Logistics application.
Logistics is becoming the core business of many companies that look to the future and the main example is there for all to see and is called Amazon.
In this article I have given three possible definitions which I summarize:
- The first definition is Lean Logistics as an incessant search for the reduction of the seven waste of logistics.
- The second definition is Lean Logistics such as the implementation of Milk Run and Water Spider as a waste reduction system.
- The third definition is Lean Logistics how to rethink the supply chain and logistics to create maximum value at the minimum total cost.