Companies at every step of the supply chain work to offer fast, reliable service without driving up costs. Lean logistics practices speed up fulfillment by improving workflows, reducing lead times, and eliminating waste, enabling your business to deliver on time and within your overall budget. Learn how lean logistics impacts fulfillment and what to look for in a partner.
Table of Contents
- What Does Lean Logistics Actually Demand From Fulfillment Partners?
- Inventory Management Inefficiencies to Eliminate
- Warehouse Process Waste Signs to Watch For
- Order Accuracy and Fulfillment Speed Red Flags
- Technology Gaps That Kill Lean Operations
- How Can You Audit Your Fulfillment Partner for Continuous Improvement Against Lean Standards?
- FAQs
What Does Lean Logistics Actually Demand From Fulfillment Partners?
Lean logistics is the process of evaluating processes to identify waste and redesigning them to be more efficient, often through tools like value stream mapping. To fulfill orders, you might use lean logistics to redesign your warehouse so that picking and packing are faster, for example.
When you’re operating under the lean logistics methodology, eliminating waste drives your decisions. The focus is on optimizing processes and procedures to eliminate bottlenecks and other unnecessary downtime at every step.
At a2b Fulfillment, we've been refining our warehouse management system (WMS) for 25 years. Our software identifies inefficiencies that help you redesign lean workflows.
Lean systems thrive on accountability. Using a checklist helps your team identify and eliminate waste throughout the warehouse and other parts of the supply chain. The team knows who is responsible for each task and can keep each other accountable with the list.
Your checklist should include:
- Inventory and Storage: Use just-in-time reorder and safety stock points to keep inventory on hand without paying to store it
- Warehouse Optimization: Incorporate zones and optimize slotting to speed up fulfillment
- Shipping and Transportation: Consistently compare rates and optimize routes
- Continuous Improvement: Routinely assess your results to look for more efficiencies
Inventory Management System Inefficiencies To Eliminate
Looking at your existing inefficiencies helps you pinpoint where you can improve. A lot of overstock and dead stock signals poor demand forecasting. Constantly storing or disposing of unsold stock can mean you’re overestimating demand instead of planning around actual customer demand, not following trends, or receiving seasonal stock too late.
Turning inventory too slowly wastes space and money, which just-in-time practices help prevent. Every extra month holding inventory means paying to store items that aren’t selling while eliminating space for hotter inventory.
Counting stock manually increases the risk of human error. It also means the team is spending time transferring data from manual worksheets into an electronic database. Manual processes also reduce supply chain visibility. If workers update inventory management systems after counting, they could miss items that sell during the time it takes to enter the data.
Lack of visibility leads to reactive warehouse management, making it hard to keep up with events like spikes or interruptions. Unlike traditional logistics, lean logistics lets you proactively plan for events to prevent them or keep them from wasting a lot of time. Aligning stock with customer needs supports inventory reduction and minimizing waste.
Warehouse Process Waste Signs To Watch For
How you organize your warehouse directly impacts your logistics operations and the fulfillment process. If a warehouse is disorganized or arranged with poor flow, the team can spend a lot of time picking items for packing and walking them to the packing area. This leads to higher labor costs.
A poor slotting strategy slows down pulling and packing, increasing lead times. Strategically organizing your warehouse saves time, reduces packing errors, and reduces costs. Consider adding a single scanning point as part of your continuous improvement efforts to reduce waste, improve accuracy, and shorten lead times. Multiple redundant checkpoints waste time without adding value.
At the other end of fulfillment, not having a clear return process creates chaos downstream. Someone picking inventory for a customer order might ship a returned or damaged item by mistake if returned inventory ended up in the regular storage location. Make sure your warehouse team always knows where you store returned merchandise.
Order Accuracy and Fulfillment Speed Red Flags
Your team should be fast, but they also need to be accurate. Multiple errors can signal inefficient pick and pack processes. For example, if a team is working with a manual tracking system, they might skip a line or misread a SKU and pull the wrong item.
If the team isn’t meeting their service level agreements (SLA) in terms of time or accuracy, look for bottlenecks slowing down the process. Orders sitting in the warehouse beyond past set SLAs can signal failures within the system and hurt service quality and customer value. It could also indicate that the SLAs aren’t realistic within the warehouse team’s capacity or that more training is needed.
Routinely measure your inventory against existing stock. Multiple discrepancies could mean certain processes aren’t working. The team may be inputting data incorrectly, so use those patterns to make informed decisions about training or workflow fixes.
Inventory management makes it easier for your team to pull and pick inventory. Seeing multiple orders with mispicked items may indicate the process is missing steps or the team is rushing. It also damages customer trust in your brand and leads to an uptick in returns.
As you work on optimizing logistics processes, be sure to include quality checks. QA before dispatch is critical to preventing many of these errors, while efficient processes can improve fulfillment speed and help the business maintain a competitive edge.
Technology Gaps That Kill Lean Operations
A warehouse management system that doesn’t integrate with other software, such as inventory management and client relationship management, can lead to multiple blind spots. For example, if the warehouse management team has to manually enter data into the inventory management system, the customer service representatives won't be seeing accurate inventory when they sell. This risks selling inventory that's not actually on hand, delaying fulfillment and upsetting customers.
Manual reporting also impacts your operating decisions and demand forecasting. For instance, you may order too much inventory because your warehouse management team hasn't logged a new shipment.
If you aren’t using technology to automate steps in your logistics operations, your team may be working harder than they need to be, unnecessarily inflating labor costs. Implementing systems that integrate with your carriers can add automation that saves you time and effort. With a direct connection, your team can skip manual data entry and send tracking numbers to your customers in real time.
How Can You Audit Your Fulfillment Partner for Continuous Improvement Against Lean Standards?
Working with fulfillment partners who follow lean logistics standards improves your overall customer service levels and supply chain performance. Before committing to a partnership with any vendor, request transparency. Look at key performance indicators, such as inventory turnover, time to fulfill, and accuracy. Note anything that signals operational inefficiencies.
Compare multiple potential partners by benchmarking their error rates, service level agreements, supply chain visibility, and inventory accuracy. Ask about continuous improvement programs, such as value stream mapping, that exist within the organization. Simply assessing your workflows once and implementing lean logistics principles won’t keep things running smoothly forever. Continuous improvements enable your supply chain partner to adapt to market shifts and stay agile as trends change.
a2b Fulfillment is built around lean fulfillment principles. We can tailor a fulfillment strategy that meets your needs and your customers’ expectations. Since our founding, we have been incorporating lean principles into our logistics operations to provide a high level of service for great value.
Incorporate Lean Supply Chain Strategy Into Your Business
Lean supply chain management focuses on eliminating the wasteful and costly parts of logistics operations. Using these principles to assess and redesign your workflows speeds up your team and improves their accuracy without costing you a fortune.
If you’re outsourcing fulfillment, choose a partner who uses lean principles to deliver. Consistent service levels that reinforce your brand standards. Contact us today to learn more.
FAQs
What Is Lean Logistics in Fulfillment?
Lean logistics focuses on managing your supply chain by assessing your workflows and eliminating waste. In fulfillment, lean logistics helps you identify and eliminate bottlenecks that add time and cost to processes, such as excess handling and disorganized warehouses.
How Can a Fulfillment Partner Reduce Logistics Inefficiencies?
Fulfillment partners can reduce logistics flow inefficiencies by optimizing warehouse layouts and logistics processes to speed up picking and packing. They can analyze previous data to identify and fix bottlenecks and use accurate inventory management systems that integrate with WMS and customer service software for better visibility. Improving these workflows helps reduce errors in shipping orders.
What Are Common Signs of Waste in a Fulfillment Operation?
You don’t need to painstakingly analyze every aspect of your operations to know you have bottlenecks. Look for common signs, such as frequent stockouts, excessive storage fees, high return rates, inaccurate inventory counts, poor communication, and repeated shipping mistakes. Track KPIs such as time to fulfill and others, and benchmark your performance over time to see if your operations have slowed.
Why Is Inventory Accuracy Important in Lean Logistics Processes?
Accurate inventory prevents your team from overselling and stocking out of an item. It also prevents you from paying to store excess inventory.
Inventory management enables your team to keep the right amount of stock on hand to meet customer orders quickly. Accurate inventory data also helps you predict demand and optimize future inventory to meet needs without excessive storage costs.
What Should I Look For in a Lean Fulfillment Partner?
Before choosing a fulfillment partner, look at their warehouse processes, inventory controls, and key performance indicators. Ask if they use scalable technology and assess their reporting processes for transparency. Look at their track record to find a partner who consistently fills orders accurately and on time. A lean fulfillment partner should be able to identify bottlenecks proactively and reduce unnecessary costs to help you improve customer satisfaction and grow your brand.
