Lean Transportation: Reduce Transportation Wastes using OTM
Taiichi Ohno, the father of Toyota Production System says, “Transportation is a waste and has to be reduced”. Transportation within the organization is considered a waste which does not add any value. What many overlook is the fact that transportation does not only imply inside the manufacturing facility but also outside it. The outside transportation can, not only help add value but also act as a differentiator. With many companies implementing Lean Manufacturing concepts, it is of paramount importance that the Logistic strategies are also aligned to it. Let us analyze the different wastes in transportation and how they can be reduced using Oracle Transportation Management (OTM), a Transportation Management System (TMS) by Oracle.
With Lean Manufacturing implementation the supplier and the manufacturer collaborate to tune themselves to listen to the customer demand and produce only what is required. They continuously aim to reduce inventory and create a pull system. This requires the transportation to have frequent truck runs with lesser quantity. Most organizations prefer going for Milk Runs with the right size equipments.
Customers also prefer smaller and frequent orders and this reduces the opportunity for full truckloads and direct shipments. In this case organizations have to look at other modes to transfer the goods. Mostly LTL transport is looked at. In many cases the orders are such that they are not fit for LTLs (more weight or volume) but do not fully utilize the full truckload capacity either. In such cases the planners forget the fact that multi-stop shipments can fully utilize the trucks.
One of the key factors for instantaneous response is proper communication between the carrier and the manufacturer. Visibility of the shipments for various reasons like warehouse planning, customer queries etc. is essential. The delivery times for all the carriers needs monitoring so that the efficient carriers can be identified.
To implement lean transportation, organizations are looking at their transport network very closely. Every route is being rationalized so that better vehicle utilization can be achieved. This exercise needs to be done continuously for reduction in the waste.
For some of the above OTM can be very useful, become partners for waste reduction and make the system lean.
Ø The schedule for the Milk Run is entered in OTM and the shipments are formed accordingly, helping the manufacturer have several runs for a pre-defined route.
Ø The planning engine of OTM takes care of the customer order planning. It helps in giving you the right mode with the right equipment to deliver the shipment to the customers at the right time.
Ø Planning engine takes care whether to build a Multi-Stop, LTL, Direct or a Multi-Leg based on all the constraints on the order.
Ø OTMs powerful Supply Chain Event Management tracks the shipment which helps in planning at the warehouse and answering customer queries quickly. It gives immediate information about the current status of the shipment. The shipments are routed to the correct Dock so that the time wastage on unloading is reduced.
Ø Cooperative Routing feature of OTM identifies repetitive routes and helps in determining the right number of vehicles required for a particular route. This supplements the Transport Network rationalization.
Ø Fusion Transportation Intelligence module provides a means to monitor Key Performance Indexes like number of on-time deliveries, number of late deliveries, total load pre lane etc. These help in making strategic decisions and revise the carrier collaboration programs to make the supply chain more effective and leaner.
Reducing wastes in transportation is one of the key factors for making the supply chain lean and OTM can act as a strategic partner to achieve it.
Acknowledgement: Anirban Roy
