Reducing Transportation Costs by Looking Within

Thanks to Lean logistics, some companies are cutting their transportation costs from within their own facilities. With fuel costs continuing to rise and employee time at a premium, manufacturers are examining how products move within their own facilities to look for potential savings.

In some companies, raw materials zig-zag their way through the facility, making multiple trips to internal storage areas and visiting processes on opposite sides of the facility before being completed for shipment. Not only does this require a great deal of employee time but materials get lost, damaged, misfiled, double labeled, and encounter other issues such as rework.

To address these issues, many companies are using the Lean methodology of Takt, Flow, and Pull. These encourage manager and staff to think of the movement of inventory as a ‘gently flowing stream’ where there is steady movement of materials from inbound receiving through painting, assembly, packaging, and final shipment. By shifting the layout based on Takt, Flow, and Pull they save time in-between each process because there is no excess movement or transportation and items get transformed into finished goods more rapidly.

Similarly, they have eliminated internal storage areas, ripping up shelves and making room for additional production facilities. In their place, companies have installed flow-through racks, if necessary, at the assembly stations, allowing employees to have more control and less movement than the alternative large inventory stacks. These flow-through racks are called “Supermarkets” where there is a strict limit on the number of Work-in-Process pieces in order to increase the flow of products and provide a predictable lead-time. This encourages a natural act of workers helping neighboring processes, preventing bottlenecks, and each helping to meet daily deadlines with less physical effort. Learn more about “Supermarkets” here.

Consider the waste of movement in your facility can some of your processes be moved closer together? Is there a better way to operate with less internal storage and space? These are questions that will help encourage a solution that will reduce your transportation and repair costs internally while shortening lead-times, and result in better quality and ownership by your employees. By reexamining your approach, you will save thousands of dollars in transportation costs within your company.