Using Lean Logistics To Decrease Transportation Costs

Using Lean Logistics To Decrease Transportation Costs

The "Price Trends" section of the October 2011 issue of Logistics Management discusses transportation pricing in the trucking industry. They have forecasted the overall trucking rates to go up 5.9% in 2011 and LTL rates to go up 8.2%.

Utilizing lean logistics engineering and routing helps to hedge these transportation cost increases that are inevitable within the industry. Below are some of the ways you can help combat the rising transportation prices on your inbound spend:

 

1. Stabilize your shipments to a consistent schedule.

2. Compare shipment costs for combining one week’s worth of material to shipping them individually and with the distance to the destination facility. Determine which way makes sense for each supplier, and create a schedule accordingly.

3. Monitor and review fill rate performance with your suppliers to reduce unplanned and additional shipments outside the normal shipping schedule.

4. Review your shipping schedules and network at least quarterly to ensure its effectiveness during that time of the year.

Over the last three years my customer and I have worked through these steps, understanding the total cost of fulfillment and continually improving year over year. In 2011, their LTL pricing went up on average by only 6%. From January to September, transportation spend without fuel only went up by 1%.

For more information about transportation management services, visit:

http://www.leancor.com/index.php?page=transportation-management

Written by Michelle Armstrong, Lean Logistics Manager at LeanCor

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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.

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