Lean focuses on satisfying customers and increasing the efficiency. To increase efficiency and satisfy customers, it is necessary to identify and eliminate waste by simplifying processes and demonstrating conformity. Waste reduction is critical within the logistics network to improve the function of a firm’s operations.
Complete your initial post using the module reading resources as a tool, address the following:
Illustrate the importance of being customer focused within the logistics network. Provide specific examples to support your analysis.
Hypothesize possible wastes that could be identified and eliminated to better satisfy customer service requirements within the logistics network.
Examine how costs could be reduced when the identified wastes are eliminated.
Notes:
Voice of the Customer
A critical component of the lean philosophy is the voice of the customer (VOC) which relates to identifying, understanding, and focusing on the priorities of the customer. Satisfying consumer wants and needs is essential to the success of a business, so logistics operations must also focus on satisfying customers. Additionally, it is important to remember that not all customers will have the same priorities. For instance, some customers value low costs while other clients prioritize timely delivery of products.
Value
A product or service has value if it satisfies a customer’s wants and needs. Any activity that contributes to satisfying a customer’s requirements is value adding (VA) (Sharma & Khatri, 2021). An activity is non-value adding (NVA) if there is no value added when that step in the process is performed; NVA activities are wastes. However, some NVA steps are necessary and cannot be eliminated; necessary non-value adding (NNVA) activities should be reduced as much as possible.
To illustrate value added concepts, suppose a customer in California orders a car manufactured in Detroit. Transporting that vehicle from Detroit to California is a VA activity because possession of that car satisfies a customer’s wants. Along the route from the manufacturing plant, the commercial trucks must stop at state mandated weigh stations. Those stops are NNVA activities to maintain compliance with state laws. However, if the vehicle were shipped from Detroit to Maine, then on to California, the transportation to Maine would be a NVA step. That NVA activity is a waste and should be eliminated. While NNVA activities cannot be eliminated, they should be reduced as much as possible.
Waste-TIMWOODS
As you learned in the previous module, eliminating waste is a key function when applying lean principles. In lean, there are several wastes that make up the acronym “TIMWOODS” including the following: 1) Transport; 2) Inventory; 3) Motion; 4) Waiting; 5) Overproduction; 6) Over-processing; 7) Defects; and 8) Skills (Sharma & Khatri, 2021). It should be noted that the logistics function of transportation is not considered a waste if customers are willing to pay for the movement of that product. The waste of “transport” refers to any unnecessary movement of products (Sharma & Khatri, 2021).
So far in this module, we have reviewed the importance of focusing on customer priorities and applying tools to identify activities that add value for customers. We have also looked at tools used in lean applications to eliminate waste and reduce necessary non-value adding activities. Throughout this course, students will have the opportunity to apply the lean principles and utilize various tools within the logistics network.
Lean Tools
When applying lean principles within logistics networks, there are several tools to help managers succeed. One such tool is “5S” which stands for the following: 1) Sort; 2) Set in order; 3) Shine; 4) Standardized; and 5) Sustain (Sharma & Khatri, 2021). Another lean tool is the 5W+ How. This tool consists of the following applied to a problem: 1) What; 2) Why; 3) Where; 4) When; 5) Who; and 6) How (Holt, 2019). The 5S and 5W+How approach are tools can be used within the logistics network. You will read more about lean tools and how to apply them to logistics activities throughout the course.
