Becoming a Lean Operation: Full Utilization

Author: 

 

Just  as manufacturers focus on reducing waste, the Third-Part Logistics (3PL) industry is driven by efficiency. A continuous improvement ideology and a strong partnership mindset is required as 3PL providers must be ever more nimble, accessible and ready for the changes their customers face today. As you identify what you can accomplish within your facility to become leaner, it is a good idea to remember that some of the best opportunities for efficiency improvement might be outside your four walls.  Finding the right 3PL partner and outsourcing your logistics services is very often one of the leanest steps a manufacturer can take.  

Full Utilization/Effective utilization

Using every available resource to create value for your product 100% of the time would be the pinnacle of a lean operation. Imagine working in a perfectly optimized environment. Goods produced would increase, labor hours would decrease and your plant would be an incredible place to work! Working with a 3PL can help optimize three main areas of your supply chain.

People

What would happen to your company’s productivity if people were focused solely on core competencies and shed more routine tasks such as picking or staging? When your employees focus on what they do best, time is spent more efficiently and your operation immediately becomes more productive. Instead of spending time with less valuable tasks, your workforce can spend their day doing what they were hired to do. Put simply, if highly skilled employees are spending time with jobs that could easily be outsourced to a 3PL, you aren’t using people as effectively as you would like.

Space

What if you could fill every available inch of your real estate with value? What if your floor space was optimized for workflow and not storage?  What if inventory levels and shipments were accurately tracked and shipped on time?  Efficient storage solutions, picking & staging and on-time transportation are a 3PLs core competencies. Optimizing space and inventory within your own facility can be difficult, but outsourcing is a simple way to free up floor space and maximize use of your facility.

Spend

Partners utilizing a 3PL only pay for the space used and services rendered. For example, if you decide to do your own logistics, there are specific tools needed. Without racking needed to efficiently store inventory, valuable floor space is used. Forklifts are also essential for moving pallets and inventory. Real estate and specialty tools have large up-front costs and aren’t cheap to maintain. Your $30,000 machine may get used 25% of the time and floor space isn’t generating maximum revenue while being used for storage. If these things are outsourced, money is spent only as it's needed, and your use of tools and floor space is perfectly optimized. It really doesn’t get any leaner than that!

Have a wonderful day!