Lean logistics is a work approach that seeks to improve corporate logistics by optimizing the flow of logistics processes and reducing waste along the supply chain.
This approach is rooted in lean thinking, the philosophy from which both lean manufacturing (in production contexts) and lean logistics (in logistics contexts) derive.
In this article we will examine what the “lean” approach entails, the advantages of lean logistics, and the key points for managing logistics activities with a lean mindset in order to improve the company’s overall efficiency.
Lean logistics is a strategic approach to supply-chain management based on a set of techniques and strategies that aim to reduce waste by eliminating every process that adds no value to the company’s workflow.
In practice, lean logistics builds on the principles of lean thinking and lean manufacturing, striving to maximize business efficiency from production to the end consumer.
Let’s look at the origins of this philosophy and how it came to be applied in the logistics sector.
This approach originated with the philosophy developed by Toyota in 1950s Japan. It is here that lean thinking was born, enabling Toyota to overcome major economic crises.
In the post-war years, Toyota was going through a difficult period: fierce Western competition and the devastation caused by World War II had left the company short of resources.
In response, Toyota began developing an innovative production system to optimize efficiency and reduce waste.
The foundations of lean thinking lie in:
The Toyota Way:
In practice, it sees every employee as a vital element capable of transforming the company’s performance. This view established a solid relationship of trust between the company and its workforce, helping to build a shared sense of purpose.
Combined with strategies to improve workflows and cut waste, this allowed Toyota to remain competitive.
The success of the Toyota Production System (TPS) led to the spread of lean thinking across many industries worldwide.
Initially applied only to automotive production, lean strategies gradually extended to other fields, embracing intralogistics, third-party logistics, last-mile logistics and the entire supply chain.
The lean approach applies lean thinking across all business areas, aiming to eliminate waste by creating standardized processes with the support of the workforce.
Following Toyota’s practices, many companies adopted this methodology, transforming not only operational processes but also corporate culture—its values and rules.
Lean thinking is therefore the foundation of both lean manufacturing—focused on cutting waste and optimizing production—and lean logistics, which brings lean thinking to the supply chain.
Authors Womack and Jones analyzed the Toyota model and identified five core principles:
Let’s review them.
To determine the value of a product or service, you must view it from the customer’s perspective and focus activities on creating that value while avoiding waste.
Only some of the activities performed add value to a product from the end customer’s standpoint. Establishing value from this perspective is vital because it explains why the customer is willing to pay.
Key questions:
Mapping the value stream is essential to analyze and optimize the workflow by eliminating non-value-adding activities and simplifying the process.
This step also reveals muda, or waste, such as excess production, unnecessary handling, administrative errors or needless production steps.
Key questions:
The third principle addresses optimizing workflow to reduce cycle time and keep it as smooth as possible.
Lack of synchrony between business activities slows the process, harming areas from production to logistics. It is essential to remove obstacles that slow or block the flow.
Key questions:
The pull system focuses on producing only what the customer actually demands, avoiding overproduction and reducing excess inventory. The term pull means trigger: the customer triggers all activities. It contrasts with the push system, in which the company “pushes” production.
Key questions:
Perfection is really kaizen: continuous improvement achieved through everyone’s collaboration. It is important to acknowledge success but never stop striving for excellence. Continuous improvement further removes waste and enhances every business process.
Key questions:
Having covered the five lean principles, let’s see how the lean concept enables efficient logistics management.
Lean thinking can be applied to any sector, including logistics. Adopting this philosophy allows you to identify and eliminate everything that slows supply-chain processes by leveraging strategies such as LTL and FTL shipping, multi-carrier strategies, cross docking, direct injection, and more.
Based on the five principles, let’s see which ones apply to creating a lean-logistics supply chain.
When discussing lean logistics, these basic principles are usually applied, but depending on the specific needs of supply-chain management, they can be further detailed or adapted.
Thus, the following are only some of the principles you might identify. Remember, they can vary; there is no standardized list. The key is to apply lean-thinking principles to logistics management to eliminate waste, create more efficient flows and improve overall operations.
Here are the strategies you can implement:
Let’s examine each point.
The first lean principle pinpoints product or service value from the customer’s viewpoint.
It is therefore essential to understand what the customer regards as value in logistics. This may include:
Optimal shipment management also requires a solid strategy to eliminate waste. To shorten lead times, improve shipping accuracy or increase delivery flexibility, you must remove activities that offer no customer value and merely slow operations.
Significant support comes from logistics KPIs, essential indicators for gauging the effectiveness of logistics activities.
As in lean thinking, the main goal of lean logistics is to eliminate waste. This includes:
A workflow map clarifies shipping dynamics and enables in-depth analysis to locate critical points, waste and opportunities to improve the flow.
Today’s logistics-management technologies are increasingly sophisticated, and data—from marketing strategies to warehouse optimization—allow new strategies to streamline flows.
ShippyPro, for instance, simplifies shipment management by offering features such as automated label creation with Label Creator, shipment tracking (Track & Trace) and return management with Easy Return. In a lean context, integrating ShippyPro can cut the time and resources wasted on manual shipment handling.
Lean logistics aims to create a continuous, interruption-free flow of materials throughout the supply chain. That involves cutting waiting times, optimizing processes and synchronizing activities to avoid delays.
An excellent tool here is analyzing warehouse KPIs, which provide insights into the nerve center of shipments.
Applying the pull principle means supplying goods only when the market demands them. This helps avoid overproduction and keeps inventory levels low.
Again, tools that support analysis to improve production—and thus shipping—revolve around robust warehouse management. Various WMS solutions offer numerous automation advantages and can oversee every part of the company.
The principle of continuous improvement also applies to logistics. Organizations constantly seek to identify and implement enhancements in logistics processes to boost efficiency, flexibility and customer loyalty while cutting waste.
An effective strategy is to engage suppliers, partners and, above all, your own personnel. Close collaboration among all supply-chain parties is essential to ensure smooth management, free of bottlenecks, in a continual pursuit of efficiency.
The benefits of applying lean logistics are many, from reducing waste and increasing operational efficiency to improving service quality and better adapting to demand.
Enhancing supply-chain efficiency reduces waste and therefore increases profit margins.
Moreover, customers are unaware of or do not perceive the value of the waste occurring along the supply chain, so optimizing logistics process flows boosts their satisfaction.