How to start applying Kaizen principles in logistics and supply chain
What is Kaizen?
The term Kaizen has its roots in two Japanese words: Kai, which means change and Zen that means good. Together, these words mean “good change” or “improvement”. In the context of lean production, Kaizen means continuous improvement.
The Kaizen philosophy is one of the most important principles in lean supply chain management frameworks. Its application has helped many manufacturers and retailers to become more competitive, to eliminate waste, to achieve higher customer satisfaction and to improve their services and product quality, as well as to have more satisfied employees.
Kaizen is a progressive approach that focuses on small continuous improvements that contribute to long-term improvements. It is applied at a tactical level and addresses systematic waste.
Kaizen Continous Improvement Cycle: PDCA
Stablish objectives or KPI, to be able to compare results vs expectations. In this stage, the problem is identified and the team develops a plan for improvements
Implementation of the improvements and data collection.
Comparison between the actual result and the desired result. Here, a new plan comes to fix what doesn’t work.
To act based on what was learned from previous steps.
How to start applying Kaizen principles in logistics and supply chain?
Kaizen is about making small changes focused on improving specific areas within the company. You can start by applying the Kaizen principles in your own department within your company. The principles will work very well especially if you work in a department that is key for the whole supply chain, such as logistics, planning, procurement, purchasing, exports, imports, transportation, etc.
Work with the company’s external stakeholders to apply the principles in any process you follow. It is a good idea to work with a freight forwarder able to apply the Kaizen Continous Improvement Cycle to your supply chain to achieve better results.
Example of Kaizen applied in freight transportation to improve the whole supply chain
Mexicom Logistics team works very closely with manufacturers and retailers that move a significant volume of loads with us. We help them improve their freight transportation process, which has a positive impact on the supply chain as a whole.
A manufacturer located in Kentucky, USA, needs to have some supplies delivered at his plant every Thursday. The supplies are delivered from Nuevo Laredo, Mexico, every Tuesday and need 2 days to arrive in Kentucky. Therefore, the plan was to cross the US-Mexico border every Tuesday to arrive on time every Thursday.
In the execution, freight left the supplier location on time. However, delays at the border crossing occurred from time to time, which caused delays in the deliveries. Some times freight crossed the border one day later, on Wednesday instead of Tuesday.
From 10 shipments in a month, 4 didn’t meet the delivery time, causing a serious slow down on the whole production.
The manufacturer contacted the Mexicom Logistics team asking for help to find ways to improve the transportation process and meet delivery times. Mexicom Logistics followed a Kaizen approach in which both teams, manufacturer and freight forwarder (Mexicom Logistics) worked together to make small but significant improvements.
We set goals:
- To deliver all shipments on Thursday.
We reviewed the current state of the things:
- Border crossing delays.
- Some times freight crossed the border on Wednesday instead of Tuesday.
- 4 out of 10 shipments were not arriving on time, which caused delays in the whole supply chain.
We developed a plan for improvements.
- Mexicom Logistics knows the border-crossing delays sometimes are unpredictable and unavoidable. Therefore, the solution should rely on having more options to accelerate the transportation process once the freight has crossed the border. As the manufacturer moves a high volume of loads with us, we suggested making sure that we have a provider that offers team driver services to deliver the loads that are not able to cross the border on time. This solution was totally feasible because Mexicom Logistics has a very wide network of carriers that offer team drivers.
We implemented improvements
- The loads that crossed the border on Tuesday were transported with a single driver. And freight that crossed the border on Wednesday was transported by team drivers. Both of them were delivered on time, on Thursday.
We reviewed the implementation
- The improvement implemented worked successfully. All shipments that were transported using a team driver were delivered on time, even if they crossed the border on Wednesday.
This is just an example of how Mexicom Logistics helps manufacturers that move a high volume of loads with us to find solutions that will improve the efficiency of their supply chain as a whole.
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