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Wednesday, December 18, 2013

Logistics and Supply Chain Management: The Lean Delivery Drone

Written by Derek Browning, Regional Vice President of Deployment at LeanCor

In a move that has generated controversy in the e-commerce market, Amazon CEO Jeff Bezos recently unveiled a plan to home-deliver packages with unmanned aerial vehicles moments after an order is placed. 

Fellow lean thinkers, let’s put our whiteboards and calculators away for a moment, and  just assume the costs of transportation, legislation, and uncle George’s duck-hunting club can be neutralized.  Let’s look at the principles that would guide this journey in logistics and supply chain management, namely the voice of the customer, lead-time reduction, and one-piece flow.

Voice of Customer
Consider Amazon’s customer base, specifically those like me who subscribe to Amazon’s Prime service.  We want our products now - not two, three, or six days from now.  The thought of clicking “buy” on my couch while filtering through a few e-mails, then picking up the recently purchased item on my porch moments later is nothing short of amazing. The time and money saved by eliminating a trip to the store makes it well-worth a nominal yearly subscription fee.  As both a customer and professional in logistics and supply chain management, I can only imagine there are thousands like me wanting the same thing.  Bezos, whether he calls it lean thinking or not, has his eye on the customer and is willing to push conventional logistics management practices to get the customer what they want. This, my friends, is how a lean supply chain should operate.

Lead Time Reduction
A lean logistics and supply chain management professional is always looking for opportunities to minimize or eliminate lead time.  Lead time is made up of two things: waste and value added activities. Thus, to reduce lead time is to minimize or eliminate waste in the supply chain.  While automation brings up many questions about flexibility and return on investment, the logistician looks at an over the road route vs. a route as the crow flies.  The logistician also observes many necessary wastes associated with road transportation (turns, waiting, etc.) while a straight delivery path eliminates many, perhaps all of those wastes.

One Piece Flow
Batching for efficiency purposes is very common in distribution.  We batch pick releases and pick-routes to minimize human travel, we batch delivery routes to minimize transportation costs, and we batch order sizes to optimize package and transportation utilization.  While financially beneficial, the lean thinker begs the questions: “What if the customer doesn’t want to order that quantity?” or what if the customer doesn’t want to wait for a truck to fill up before it leaves the facility?”  It looks like this new paradigm of distribution thinking will answer those questions with, “Now he doesn’t have to.” 

Automation often brings up many questions about flexibility and return on investment, but let’s look at this closer:  an over the road route observes many necessary wastes associated with road transportation (turns, waiting at stop lights, etc.), while a straight line delivery path eliminates many, perhaps all of those wastes.

A facility that can pick orders and flow them through without stopping to an unmanned aircraft for single-piece delivery, minimizes or even eliminates the batching of orders arriving at the ideal state – a single-piece flow model.

Regardless of your position on the approach, this shift in the logistics and supply chain management industry should cause ample reflection in your own supply chain:

Do you know, and how are you responding to your customer’s voice?

Are you willing to think beyond industry paradigms to reduce lead-time?

What will it take for you to shrink your current batch sizes?

Author Biography

Derek Browning is a Regional Vice President for LeanCor Supply Chain Group.  LeanCor is a trusted supply chain partner that delivers operational improvement and measurable financial results. Derek’s supply chain and logistics experience has encompassed transactional transportation management, logistics network and route designs, supply chain and facility assessments, lean cross-dock and distribution center projects, people development, and the deployment of lean principles and practices in several cross-functional areas. Read more of Derek’s views on logistics and supply chain management at LeanCor.com.

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1 comment:

  1. I want to thank the author for publishing this great read. Now a days, supply chain management is very important for students. One should admit himself to a best institution.