LEAN LOGISTICS

The term lean, as a translation of “lean”, appeared in the business literature to describe the Toyota manufacturing system. Such a system was lean for a number of reasons: it required less human effort to design and produce the vehicles, required less investment per unit of production capacity, worked with fewer suppliers, operated with fewer parts in stock at each stage of the production process, recorded fewer defects, fewer accidents at work, and significant reductions in time between product concept and commercial-scale launch, between customer order and delivery, and between problem identification and resolution of the same.

Lean manufacturing came to be known as “just-in-time” manufacturing and its adoption by countless companies around the world obeyed a series of requirements, among which can be mentioned the shift from pushed production to pull production. , developing suppliers, eliminating activities that do not add value, empowering employees to propose ideas that lead to improvements in products and processes, and involving customers in product development.

As the most visible economic repercussion of adopting the lean concept has always been the reduction of inventories, through more frequent deliveries and the reduction of purchase and/or manufacturing batches, the premise of “lean resupply” arose in the field of logistics, an expression that mistakenly many started to replace it with “lean logistics”. While lean resupply is a limited concept, as it considers only supply operations, it can be inadequate as it does not correctly assess all the trade-offs involved in its adoption (increased transport costs or inefficiencies caused in supplier and customer systems). , the concept of lean logistics is broader and involves initiatives aimed at creating value for customers through a logistical service carried out at the lowest total cost for members of the supply chain.

In several publications on the difficulties of adopting the Supply Chain concept, it is possible to find references to conflicts between potential partners due to factors such as delays in deliveries, errors in documentation, inadequate packaging, etc. All these factors cause loss of time, annoyance, rework and distrust, among other problems, seriously compromising the constitution of a chain. Lean thinking, when applied, seeks to make the parties involved work together to eliminate these sources of waste.

This article seeks to address the concept of lean logistics and, more specifically, the lean logistics service. We will illustrate, through a series of examples, how companies from different segments have taken advantage of the lessons learned from lean systems to develop competitive advantages through their logistics systems aimed at creating value for their customers and other members of the supply chain of which they are part. .

Lean solutions for logistics services

Although many authors have written about “Lean Manufacturing” and its effects, Womack and Jones, since the best seller “The machine that changed the world”, launched in 1990, are the researchers who have most closely followed the evolution of the lean concept and the different connotations and applications that the concept has come to have in the business world. In 1994, in the article “From Lean Production to the Lean Enterprise”, they sought to extend the concept to the entire organization, drawing attention to the processes that do not generate value for the customer and how any company, in any sector, in any country, can work in reducing waste. In 2003, perhaps noticing the emergence of several “recipes” to put the lean concept into practice, those authors released the book “Lean Thinking”, with its proposal of five principles to help companies adopt the concept as a way of thinking about the future. work and not as a toolbox.

In their most recent work (Lean Solutions, published in 2005), Womack and Jones introduce the concept of “Lean Consumption”. The idea is not that customers buy less, but that they have less difficulties, less annoyances when using and consuming the products and services they purchase. So, just as companies have adopted practices with the aim of eliminating inefficiencies in their production processes, now is the time to think about initiatives that provide customers with a more efficient shopping and/or consumption experience with less sacrifice. The principles of lean consumption are shown in Figure 1:

Although the above principles were enunciated with the end consumer in mind, they are perfectly adaptable for all types of customers; even more, if we think that every company belongs to a supply chain, we can, in some principles, include suppliers as a target of lean initiatives. So, for example, if a particular company examined its goods receipt process, it could find ways to not waste the time of drivers and vehicles from suppliers or service providers that perform inbound transportation.

The furniture manufacturer, who supplies the stores where his products are sold, would know that there is no point in delivering the tables he ordered to the customer if the chairs, which are also part of the order, were not completed within the agreed period.

Let's see, through examples, how some of the principles of lean consumption can be found in logistics solutions designed to make the customer experience efficient.

Completely solve the customer's problem

Martin-Brower McDonald's is the division of MB Brasil responsible exclusively for the connection and logistical operation between suppliers of the McDonald's network and the more than 500 establishments spread throughout Brazil. From the beginning, the company sought to understand its customer's competitive criteria: consistency (the products sold in stores are always the same), speed (the company operates in the fast food sector) and price (McDonald's products are not the cheapest on the market , but there is a concern to reduce costs so that prices do not deviate from those practiced by competitors).

In order for its client to be successful with its clients, MB has developed a logistics service project that pursues these competitive criteria on a daily basis:

– Together with the main suppliers (meat and bread), he created the Food Town condominium in São Paulo, which brings together the manufacturing facilities of those suppliers and the main MB distribution center, where orders from stores and other distribution centers are processed. company distribution. All the products needed to supply the stores (with the exception of soft drinks) converge in Food Town. The objective of the project was to ensure the necessary synchronization to quickly respond to incoming orders. Each store sets its own “service windows” and the frequency of these deliveries (two to three per week, depending on the store) is one of the important indicators used by McDonald's to measure MB's performance.

– Also with the aim of synchronization (according to the principle of Womack and Jones that “products need to work and work together”), the vast majority of MB trucks have three compartments at different temperatures to accommodate different types of store needs, with the objective of minimizing the number of deliveries and also reducing the probability that some products will arrive and others will not.

– In order to avoid errors both in issuing and receiving orders, MB developed an electronic form for sending and receiving orders via the internet. This measure drastically reduced rework, urgent deliveries and lack of merchandise in stores.

– MB installed an ERP system with modules for sales forecasting, receiving orders, controlling its own and supplier inventories, reporting sales per store and daily monitoring of performance indicators.

– To optimize the number of boxes of products to be transported by truck and by route, the company acquired a routing program that determines, depending on the orders to be delivered, the best route for the vehicle.

– MB maintains a Customer Service 24 hours a day, seven days a week, to respond to emergencies from stores and drivers in case of any problems en route.

McDonald's pays the operating costs declared by MB and monitors the partnership through a set of indicators that track the partner's operating efficiency. Through measures such as stock turnover, the number of MB employees per restaurant served, the percentage of orders without errors over the total orders, the number of boxes delivered per route, among others, McDonald's guarantees that, through logistics lean, MB can completely solve your problem.

As it operates in a mature market, with intense competition, McDonald's is always thinking about promotions, new products, etc. MB is not just an operator that supplies stores; is an integrated logistics operator that manages the logistics intelligence of the chain, developing solutions that respond to the challenges faced by the customer, pursuing the minimum total cost for all members of the chain.

Although the example above has sought to illustrate the first principle of lean consumption, we can see that the logistical service provided by MB McDonald's is aligned with several other principles.

Don't waste the customer's time (and that of suppliers, service providers...)

The old notion of waste was closely related to materials that were lost, which could not be reused, something very tangible and that accounting had to record as losses in industrial processes. But what about misused time? Time paid to employees but not usefully consumed because there was a lack of material, or because the previous step did not finish its part, or because the supervisor is solving a problem in the other building and the employees are waiting for orders, or because the machine broke down and do you have to wait for maintenance people, etc.? Lean manufacturing sought to reduce all these wastes, designing processes that sought to optimize the use of labor, establishing synchronicities, employing the concept of multifunctional labor, allowing an employee to work on other tasks when required. by its activity diminishes or temporarily does not exist.

These same actions can be taken to services, but their adoption has been very slow. How much time does the customer lose in the connection between two flights because there is no synchronization between the processes? How long is the driver and his vehicle stuck because the reception operation is poorly designed or because the person who needs to sign the receipt is not present? How much time is lost to unload the goods at the port? Logistic systems are full of examples related to the non-compliance with this principle.

How to eliminate wasted time? The keyword is process. It is necessary to map all the activities that need to be carried out so that that operation takes place in the shortest possible time. What can be done in parallel? What are the critical activities, the ones that can cause the delay? Let's look at a well-known example these days. In the service design of any of these low cost/low fare airlines, which currently exist in almost all countries, there is a very important guideline: to reduce the time the plane remains on the ground. Anyone who has flown with GOL may have observed some procedures that seek to eliminate wasted time:

– The concern with cleaning the plane before landing, even asking passengers for help. This cleaning is facilitated by the nature of the products served on board and by the non-distribution of newspapers. The cleaning task is one that can compromise the time the plane remains on the ground;

– The concern to notify the passenger that the plane that will take their flight is already on the ground. This prevents passengers from distancing themselves and, at the time of boarding, everyone is close by, streamlining the operation;

– The request to board earlier passengers whose seats are at the back of the cabin. The accommodation of passengers and their hand luggage is a critical activity. At some airports, hand luggage control is strict; Baggage of a certain weight and/or volume is not allowed because it may take time to be accommodated;

– Employees are cross-functional; those who work at check-in can be moved to streamline boarding operations, making them faster;

– The planes are refueled only at certain airports, taking advantage of the lower price of fuel. This measure also contributes to reducing the time on the ground.

Let's see another example in which wasting time can even mean the death of the customer. This is a case of hospital logistics:

A stroke (Cerebral Vascular Accident) is a syndrome that causes interruption of blood flow in the brain. A stroke is ischemic when a blood clot blocks a blood vessel. It is the greatest cause of physical and cognitive disabilities in our midst. Thrombolytic therapy (injection of the rt-PA enzyme to dissolve the clot) significantly increases the chance of a complete recovery from a stroke. The therapy, however, presents a critical prerequisite: so that the effects of the stroke can be minimized, the treatment needs to occur within a maximum of three hours after the occurrence of the interruption of the blood flow. Thus, the great challenge is the agility and synchronization of the procedures, including the recognition by the patient and/or their family members that there are stroke symptoms, the removal of the patient to the hospital, their hospitalization, etc.

At the Mãe de Deus and São Lucas hospitals, both in Porto Alegre, several initiatives were implemented to reduce times in cases of suspected stroke:

– Establishment of stroke protocols;

– Formation of stroke teams;

– Emergency training to identify any warning sign for stroke;

– Ability to quickly perform a tomography of the skull;

– Ability to quickly perform an electrocardiogram and blood draw;

– Establishment of quality indicators;

– Stroke unit (one doctor and a team responsible from the beginning to the end of the treatment, eliminating ambiguities and line of responsibility).

The results obtained in the first two years of adopting the procedures revealed that the time between arrival at the hospital and the start of treatment dropped from 1h 40min to 49 min. Published data on the same type of care in hospitals in Canada and Sweden, two centers of world reference, show times between 48 and 106 minutes.

Offer what the customer wants, exactly where they want it

Tesco is currently the largest supermarket chain in England, with over 31% market share. In world terms, it is the fifth largest chain, with an annual growth of 10% in its sales in the last year.

Through a logistical system that continually replenishes its stores, guaranteeing a service level of 96% in terms of availability, Tesco, with its five store formats, goes beyond offering what the customer wants; it is where the customer wants it.

– Tesco Extra: is the hypermarket format, located outside cities;

– Tesco Superstore: standard-sized supermarkets located in middle-class neighborhoods;

– Tesco Metro: medium-sized stores in the city center and close to the main Metro stations or busy public transport points;

– Tesco Express: small stores scattered throughout the city;

– Tesco.com: Internet sales.

The distribution centers integrate orders received from all types of stores, but for each format there is a specific distribution scheme, considering, for example, that Express stores work with small volumes, do not have a storage area and, for For this reason, they need to be continually replenished.

The company's loyalty program is an important ally in the objective of maintaining lean logistics. Information on the purchases of more than 12 million registered customers enables Tesco to offer the right products for each establishment and run the right promotions for the right customers.

Continuously add solutions to reduce customer time and hassle

This last principle evokes the premise of continuous improvement. In the context of this article, continuous improvement would be the relentless pursuit of waste in the supply chain. Lean logistics has many challenges, but it also has a series of allies and actions to be practiced to achieve its objective: agility, synchronization, process analysis with the objective of identifying where time is wasted and where stocks accumulate, collaboration with suppliers and customers for demand planning, investments in information technology to monitor vehicles, control stocks and have online indicators to measure performance and anticipate corrective actions on the way.

Both Martin-Brower Brasil and Tesco, certainly the most complex examples cited in terms of logistics activities, are companies in constant challenge in the continuous search for solutions that make the supply chains of which they are part more efficient.

BIBLIOGRAPHY

Womack, James P.; Jones, Daniel T. Lean Consumption. Harvard Business Review, Mar 2005.

Womack, James P.; Jones, Daniel T. Lean Solutions. FreePress, 2005.

Friedrich, Mauricio; Mannetti, Euler; Martins, Sheila. Implementation of Thrombolytic Therapy at Hospital São Lucas da PUCRS and Hospital Mãe de Deus in Porto Alegre, Rio Grande do Sul. Neuroscience Magazine, Vol. 12, no. 2, 2004.