What is Lean Logistics?

Cargo Flores Apr 05, 2025 0 Comment

What do we mean by lean logistics?

Lean logistics is a management and organization system that uses procedures from the Lean Six Sigma methodology applied to the logistics chain. This methodology is fundamentally oriented towards continuous improvement, prioritizing the efficiency and agility of processes, through the elimination of waste, and quality, through the reduction of variability in the processes.

Value chains and Lean logistics

Lean logistics is an operations management and organization system that employs procedures based on the Lean Six Sigma methodology, oriented towards continuous and gradual improvement in the logistics chain. Its structure, solid and integrative, focuses on the whole company and for the whole company. The concepts that summarize this methodology can be expressed as follows:

Lean = efficiency and agility (improving flows by eliminating waste).
Six Sigma = quality (improving processes by reducing variability).
Lean Six Sigma allows to increase speed and quality, and to make processes more agile, productive and profitable.

All organizations can create their own development model through cycles of adaptation and progressive improvement. In all models, logistics management must be aligned with the company’s strategic objectives and integrated into the value chain of each family of products or services generated.

Reduce variability

Stability in a process can be understood as the capacity to produce results in a sustained manner. Its antonym, imbalance, is the result of variability, and it is imperative to analyze its causes in order to define and implement preventive and corrective actions to eliminate them and achieve equilibrium.

Value chains can be highly variable in terms of time and cost. In the field of chain operations, this variability is often caused by factors such as the following:

Lack of knowledge of the real needs of the clientele.
Inefficient procedures.
Stock outs.
Product shortages.
Mismatches in inventory levels.
Confusing document processes.
Deficiencies or alterations in transportation routes.

Given the unpredictability of the impact of these causes, companies tend to increase the volume of safety stocks, which in turn leads to an increase in logistics costs and, in the medium term, the potential obsolescence of products.

Lean logistics begins with the generation of value stream maps (also known by the acronym VSM), which identify in detail the set of tasks that make up each process and specify the value from the customer’s perspective, i.e., the tasks for which the customer is willing to pay.

This is a first step in determining which activities do not add value to a logistics process and should be eliminated. The consequence of this will be a reduction in variability, an increase in process standards, a reduction in process cycle times (in the preparation or delivery of an order, for example), the ease of identifying any possible abnormalities and the possibility of establishing improvement plans to prevent waste.

Avoiding waste or wastage

In logistics operations, activities that do not add value but consume time or resources, i.e., waste for which the customer cannot be charged, tend to be concentrated in these areas:

Unnecessary tasks, movements or searches.
Delays in deliveries, rejections and returns.
Transport with wasted cargo search capacity.
Idle staff time and waits for goods to be picked up or delivered.
Underutilized or inefficient infrastructure or equipment.
Consumption of energy resources.
Breakdowns in goods due to deficient stowage.
Occupational accidents due to deficiencies in prevention.
Generation of waste and polluting emissions.

Eliminating waste through corrective actions is a key factor to guarantee the continuous flow in each service provision, when requested by the customer and ensuring delivery within the offered times.

Lean logistics tools

Lean Logistics provides a set of tools that allow the development of strategic areas of the organization and the planning of its activities, through a “micro” and “macro” knowledge of each of the processes and procedures, and of the material and human resources, such as the following:

Delving into the needs and expectations of customers and the key characteristics of the service they expect to receive.
Creating maps of current value and those to be achieved in the near future.
Systems that facilitate demand measurement and the implementation of pull versus push methods.
Perform failure mode and effect analysis and troubleshooting diagrams to identify actual or potential errors and create prevention, monitoring and response plans.
Develop team energizing techniques that promote collaboration and involve the entire organization.
Define the metrics and indicators needed to measure performance in operations.

Operating tools

Lean Logistics also provides techniques and systems that enable immediate improvements in daily operations, including the following:

Document classification and operations and inventory management systems.
Techniques for rapid resolution of processes that require immediacy, such as the reception and dispatch of materials or the handling of loads, for example.
Total productive maintenance” techniques that enable maximum effectiveness of tools, equipment and vehicles, and significantly reduce operating costs.
Continuous flow operations management and work cells that reduce response times and maximize staff skills and performance.
Signaling systems using visual, audio and text elements (known as Andon) to notify of problems or situations requiring attention, providing real-time information and feedback on the status of a process.
Systems to keep the work area organized, clean, safe and productive (such as the 5’S), which reduce the accident rate, increase the useful life of equipment and ensure that personnel work in a pleasant environment.

Applications and examples of Lean logistics

The development of Lean logistics and the application of its tools may mean the need to make some economic investments in technologies or management systems, which have to be integrated into the strategic planning of the organization and which can contribute to the automation and standardization of tasks. However, the most important investment, which will not be the most costly, must focus on the training of human teams, at all levels of responsibility, which will allow the application of the new tools and the acquisition of new habits.

The results of applying Lean logistics will result in cost reductions in all operations, such as warehousing, transportation and administration, especially by promoting certain strategies, among others:

Re-dispatching systems that limit stock holding and speed up distribution.
Procurement management through just-in-time deliveries.
Reduction of supply times, both internal and from suppliers.
Measuring, balancing and controlling the workloads of people and equipment (e.g., drivers, load and material handlers), involving them in forecasts and decisions.
Standardize operations as much as possible, which will reduce their variability and improve their understanding and execution by the work teams.
Ensure quality at all points in the chain to avoid repetition of tasks.
Optimize vehicle loads, transport routes and deliveries (monitoring of deliveries in urban distribution of goods and customer experience in receiving orders).

Benefits of implementing Lean Logistics

In turn, the implementation of Lean Logistics will bring significant benefits such as:

Reducing the capital investment necessary for the development of the business activity.
Reducing the resources allocated to equipment and infrastructure.
Reducing the variation of demand data throughout the supply chain.
Reduce costs arising from defects, overstocking, space and used items.
Maintain minimum inventories throughout the supply chain.
Improve delivery service to customers by reducing lead times and delivering the quantities requested.
Increased safety of people and equipment.
Better utilization of available resources, such as machinery, labor, materials and time.
Optimize the use of packaging, the performance of vehicle fleets, cargo transport units or transport routes.

This set of benefits has an impact on two significant aspects of business operations. On the one hand, Lean Logistics makes it possible to redirect capital investments to activities that add value to production processes and, on the other, the volume of hidden or outsourced costs is reduced by reducing the impact caused by energy consumption in non-optimized operations, which are a source of pollution to the environment. It should be recalled that the reduction of energy resources is one of the priorities of business activities, in line with those indicated in international agreements (European Union 2030 and 2050 targets) on polluting emissions, which promote a transition to a zero carbon and climate change resilient economy.