Lean principles take on new meaning for logistics providers in recession - Nashville Business Journal:

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Reducing waste has meant returning to basicsa and learning lean management skills to survivew in atighter economy. “While leaning inventories in principlre is agood thing, it was also from a practicapl standpoint, not always done,” says Care y Treadwell, director of global business with LLC. “Thers was still a lot of hedge withinncertain clients’ supply chainss because you still had the luxury to do so. Now, given the economic restraints ofthe market, what previously had been optionakl is more essential.
” Private general freight trucking companiesw are a good example of the roller coasted the overall distribution and logistics industry has been on in recenrt years. Nationally, these companies’ revenuer growth has slowed, according to They saw revenue growthuof 10.6% in 2005 and 9.38% in 2006 but that growtjh fell to 3.8% in 2007 and 5.9% in 2008. “Evejn though the overall industry is the price efficiency afforded by freight trucking couled be turning businesses back to freight from othe r formsof transportation,” says Melinda Crump, spokesperson with Sageworks.
The inventor index is another indicator that distribution and logistics companies are seeinfg theiroperations shrink. After five straighr years of manufacturingand non-manufacturing inventory growth, 2009 has seen significanty dips in both sectors, according to ISM’zs February data. Any number above the baseline represents growtuh while a number below it represents Manufaucturing inventories dropped to a reading of 37 inFebruaruy 2009, from a baseline of 42.6. Non-manufacturing inventories droppede to a reading of 39 in the same from a baselineof 50. So how do we do it? The idea to operatew leaner is one many distribution and logistics providerds are clinging to inthis economy.
One way companiesd can find efficiencies is by exploringlean principles, accordingh to David Will, managedr of lean enterprise at Buckeye has been doing this for three yearsx to streamline its entire business, everything from management to accountinyg to human resources. “We see it as a way of to start addressing how you manage a business goinbg intothe future,” Will says. Will thinke lean principles have many applications for distributiobn andlogistics companies. About 70% of businesses that try to incorporatw lean practices fail becausethey don’t do enough to make it a part of the company’z culture, he says.
“You can’t buy lean, you can’ t delegate lean, you have to practicre and learn lean from the top of managementron down,” Will says. It helps to have at leas one employeededicated full-time to lean Lean practices look at a company’s entire supply chain, which helpe distribution and logistics companieas by making them more involved in their real-time operations. “We’re at the tablwe and a party to those conversationsw so we can be astrategic partner,” Treadwelll says. Another way of cutting back on exces is to be prudent about whatyou have, where you have it and why you have that much of it according to Treadwell.
This can apply to labor, where sometime s smaller orders can require the same amountg of workers as bigger That means making eachshipment count. “We’re seeing more attempts at consolidated shipments, more planningh of shipments so thatthere isn’t a lot of rehandling of he says.