Material transportation and logistics costs are a significant part of the total manufacturing expenses. Reducing them can improve efficiency, profitability, and environmental sustainability. In this article, you will learn some of the most effective ways to achieve this goal, based on the principles of lean manufacturing and supply chain management.
One of the first steps to reduce material transportation and logistics costs is to choose the optimal locations for your manufacturing facilities, suppliers, and customers. Ideally, you want to minimize the distance, time, and complexity of moving materials from one point to another. This can reduce fuel consumption, emissions, inventory, and risks of delays or damages. You can use tools such as geographic information systems (GIS) and location analysis to evaluate different scenarios and trade-offs.
Effektive M?glichkeiten zur Senkung von Materialtransport- und Logistikkosten sind: Optimierung der Routenplanung, Nutzung von Technologien wie IoT und KI zur Effizienzsteigerung, Implementierung von Lean-Prinzipien, Zusammenarbeit mit zuverl?ssigen Lieferanten und Konsolidierung von Sendungen für gr??ere Mengenrabatte.
We simplify the most complex transport logistics and events projects, using bespoke technologies to reduce cost and streamline operations
Another way to reduce material transportation and logistics costs is to implement pull systems, which are based on the concept of just-in-time production. Pull systems aim to produce and deliver only what is needed, when it is needed, and where it is needed, by responding to the actual demand from customers. This can reduce waste, overproduction, excess inventory, and unnecessary transportation. You can use tools such as kanban cards, supermarket systems, and electronic data interchange (EDI) to facilitate pull systems.
Materials (over)transportation, is one of the most chased waste of lean approach. For inbound/outbound flows the specific KPI's are related to the transportation costs. Kilo or cubic meter transport per kilometer. Inside the plant, the material handling and transports are measured by time. Spaghetti diagram analysis is one of the optimization tools. Milk run could be a solution.
A third way to reduce material transportation and logistics costs is to optimize the transportation modes and routes that you use to move materials between locations. You want to choose the most efficient, reliable, and cost-effective mode and route for each shipment, considering factors such as distance, volume, weight, speed, frequency, and service level. You can use tools such as transportation management systems (TMS) and route optimization software to compare different options and plan the best routes.
A fourth way to reduce material transportation and logistics costs is to consolidate shipments and loads whenever possible. This means combining smaller shipments into larger ones, or filling the available space in a vehicle or container with different materials. This can reduce the number of trips, vehicles, drivers, and handling costs, as well as improve the utilization of transportation resources. You can use tools such as load planning software and freight consolidation services to achieve this.
A fifth way to reduce material transportation and logistics costs is to adopt sustainable practices that can reduce the environmental impact of your material flows. This can also benefit your reputation, customer satisfaction, and compliance with regulations. Some of the sustainable practices that you can adopt include using renewable or alternative fuels, optimizing vehicle maintenance, reducing packaging materials, recycling or reusing materials, and participating in green logistics programs.
A sixth way to reduce material transportation and logistics costs is to collaborate with your partners, such as suppliers, distributors, carriers, and customers. By sharing information, resources, and risks, you can improve the coordination, visibility, and flexibility of your material flows. This can lead to lower costs, higher quality, and faster delivery. You can use tools such as collaborative planning, forecasting, and replenishment (CPFR), vendor-managed inventory (VMI), and strategic alliances to foster collaboration.
For cost effectiveness in transport and logistics:- 1. Plant location selection:- Optimal location for plant where raw material and market for product is available, roads are good, manpower available. 2. Establish pull:- Prefer Pull principle of lean 3. Choose options based on economics and reliability for transport. 4. Development of vendor for shipping so we can ask for bulk discount. Timely review cost and time, and take corrective actions.
In my experience at work , i have piloted a project at supply chain to reduce logistics cost and in this,we took 3 major KPIs to improve ,sustain and monitor,that gave us expense reduction for logistic transportation. 1> Right sizing the container size( 24 ft to 32 ft) by optimizing the inventory levels enables optimum efficiency in number of trips reduction. 2> Improving the Truck fill ratio of each container gives you the effectiveness at each trip - there by there was good saving in number of trucks when we improved TFR from 65% to 80%. 3> Reducing the Truck Turn Around time in our premises with large scale operations by optimizing /balancing ports usage for unloading operations through Process mapping enhanced value stream, reduced cost