3 Components to a Complete Lean Transportation Management System

transportation-management-systemWhen we hear "transportation management system" at LeanCor, we don't just think of software. We think of the people, processes, and technology that work as a whole to move materials and information. Lean thinking can help organizations develop and maintain a fast, stable, efficient transportation management system. All it takes is a willingness to examine new ideas in a mature business function. When shippers apply lean thinking to people, process, and technology in transportation, the results are significant. Below are best practices in each category that are benchmarks for success. Are these practices part of your organization's transportation management system?

People

Suppliers fulfill our order instructions to meet our production requirements.

We have strategic, long-term relationships with carriers that are aligned with our company’s expectations and help meet our business goals.

We understand competitive factors in the transportation industry and use them to drive decision making.

We partner with a third party logistics provider to manage our transportation management.

We have formally educated, experienced, and disciplined logistics professionals on our transportation team.

We have trained, informed, and engaged nonsalaried team members on our transportation team.

16. Our transportation team collaborates with different departments to achieve overall company goals.

It is often said that people are a company’s most important asset. Yet, how many companies pay homage to that belief? Excellence in transportation management depends on companies recognizing workers as an extremely valuable piece of the corporate puzzle. After all, logistics processes are labor intensive and hence the importance of people. Although many people are looking for the “magic bullet” from technology, the fact remains that logistics is about processes, and people execute processes.

Lean Leaders invest time, effort, and resources for team member training and education, and ensure the appropriate curriculum for all levels of the organization. When the Lean Leader successfully engages all team members in order to drive measured results, they will begin to witness the power of lean thinking and the true intent of building a lean culture. This is to fully engage customers, suppliers and all team members to increase customer satisfaction, increase revenue, reduce costs and improve working capital – all while creating rewarding careers for team members.

Process

We engineer pre-determined, repeatable route plans for our inbound networks

We engineer pre-determined, repeatable route plans for our outbound networks.

We re-adjust our route plans on a daily basis to gain efficiencies.

We adjust our route plans based on seasonality factors.

We have a Plan for Every Part (PFEP).

We measure our trailer cube utilization and perform trailer audits.

We consolidate shipments to increase trailer cube utilization (mode optimization).

We start with customer demand and consider overall value when sourcing carriers, instead of transportation rates alone.

We know how our carriers are performing relative to service (i.e. on-time pick-up/delivery, communication, fall-outs, etc.).

Our carrier bids ensure we always have the right carrier and rate for each load.

We leverage inbound and outbound transportation as one network.

Our transportation management strategy is part of our end to end supply chain strategy.

The fact is that transportation processes need to be managed with the same rigor as any other important function in the business. We need to start the day with a transportation plan, we need to execute to the plan, and then check actual condition to the plan. Any waste that exists needs to be documented, and problem solving needs to happen around the waste. Going over monthly reports that average everything out will simply not do the trick. Companies must invest in the infrastructure, technology, and trained people. In addition, they need to commit to create daily route designs, complete real-time track and trace, generate real-time metrics, and complete daily problem solving. This investment and focus on process discipline is the lean way.

Lean thinking can be applied significantly to the transportation function. All it takes is a willingness to examine new ideas in a mature business function. Stability of process and cost management can occur when shippers, carriers, and 3PLs begin to work together towards true win-win-win relationships.

Technology

Our Transportation Management System (TMS) can notify us of an incomplete shipment and available recovery options before delivery.

We issue web-based advanced shipping notices (ASN) to our customers.

We receive web-based ASN’s from our supply base.

We track shipments in a way that provides sufficient visibility to our freight at all times.

We have established measurement systems that drive daily continuous improvement in our transportation management.

Our TMS facilitates real-time, exceptions-based communication.

Our TMS easily integrates with our other systems.

Transportation Management Systems (TMS) continue to offer a strong ROI for shippers, and that trend shows no signs of slowing down any time soon. From designing routes to changing the way a business handles its freight auditing, third party logistics software can be a solution to many transportation problems. Technology should serve to support process discipline – in other words, create the optimal process, then automate it with technology. Technology can drive lean principles such as standard work, stability, visual management, and waste reduction through transportation management functions.

Technology should also provide increased, actionable data access. Event data (or real-time data) are the voice of the process as the process is in operation. In other words, event data are the feedback from our processes at the exact time they are being executed. These data are powerful, but hard to gather. Without event data, we continue to manage with information derived from historical data and consequently cannot manage in a timely manner. When we do capture event data, they enable us to make sound business decisions in real time. The ability to make real-time decisions is crucial to waste elimination and lean implementation.

Posted by LeanCor Supply Chain Group

LeanCor Supply Chain Group is a trusted supply chain partner that specializes in lean principles to deliver operational improvement. LeanCor’s three integrated divisions – LeanCor Training and Education, LeanCor Consulting, and LeanCor Logistics – help organizations eliminate waste, drive down costs, and build a culture of continuous improvement.

LinkedIn Google+

Website

0

NEW: Resource Center

Lean Logistics and Transportation Management

From carrier management to network design, browse our best content – webinars, articles, videos, podcasts, and more. 

Visit the Transportation Resource Center

Subscribe Now!

Recent Posts

Supply Chain Brief