To successfully implement the continual improvement efforts integral to lean management in third-party logistics requires three key components: (1) the right tools, (2) the right processes and (3) the right corporate culture. In most cases companies have or can easily acquire the necessary equipment. Similarly, the appropriate methodology can be put into place fairly quickly. The biggest hurdle might be the development of an organization-wide culture that embraces lean concepts and empowers all associates to find and eliminate waste and non-value adding activities.
Success won’t happen overnight. Lean requires commitment, a long-term perspective and an achievable mix of short-term and long-term goals. The following six elements are key to lean culture in third-party logistics or any other business:
- Mutual Trust and Respect – Every member of your team needs to be trained in problem solving. Associates need a say in the organization’s direction and their ideas and suggestions should be given thoughtful analysis and consideration and implemented when they improve efficiency and/or lower costs. Each team member needs to feel like their work makes a valuable contribution to the team’s success.
- Freedom from Fear – Taking risks, experimentation and learning from mistakes must be encouraged. Lean is about challenging existing procedures and methods and finding ways to improve upon them and eliminate waste. No associate should be afraid of punishment if they make a mistake. No full-time associates should be afraid of their jobs being eliminated. Staff reduction should never be goal of any lean initiative. You need buy-in from all associates. You want team members to learn and grow and become more valuable to the organization through their participation in continual improvement processes.
- Communication – Management from the top executives on down to frontline managers need to communicate a consistent, unified vision for the lean initiatives and the reason for change. In addition, feedback needs to be ongoing. Open dialog and collaborative problem-solving are vital.
- Metrics – Throughout the organization a wide range of metrics can and should be used to evaluate the progress of lean initiatives. However one key benchmark that should never be overlooked is morale. If associates are truly engaged and find the process of problem solving to find and eliminate waste exciting and enjoyable, your other KPIs should also reflect this.
- Celebrating Success Big and Small – Every accomplishment, big and small, needs to be recognized and celebrated. Small wins build upon each other over time. Bigger wins can serve as milestones along the path. When goals are achieved (or better yet exceeded), they should be rewarded.
- Leadership – Managers at all levels need to tutor and coach their teams in lean enterprise best practices and in the processes they have implemented for continual improvement. Corporate commitment to these efforts needs to be demonstrated from the top down.
FW Warehousing initiated an open-book management system based on the Great Game of Business in 2012, which the center piece of their continual improvement and lean management initiatives. Improvements in third-party logistics like improvements elsewhere in a supply chain or distribution channel network will benefit the entire system and have a positive impact on customer satisfaction ratings and profitability.
FW Warehousing is based in the St. Louis metropolitan area in Sauget, Illinois, and operates warehouse distribution centers in three Midwest states, Missouri, Illinois and Indiana, totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, the firm later broadened its services to include cold storage, general warehousing and chemical storage. In addition, FW has more than 60 years of experience in third-party logistics, and has been ranked in the top 100 Third Party Logistic Companies in the country by Inbound Logistics magazine.
For more information about FW Warehousing’s full range of third-party logistics services, visit the FW Warehousing website.