Think of your company as an organism. It has an internal metabolism and various levels of health. Just as we need food to sustain our health, your company needs a steady flow of materials flowing into it to stay vigorous and profitable.
Transportation waste happens when the movement of those materials isn’t as efficient as it could be. Well thought out planning, both when it comes to shipping and moving them around at your company, can eliminate a lot of transportation waste.
Shipping Waste:
When I need something for my business, especially if I need it right away (usually because I didn’t plan ahead of time) it’s very easy to pick up the phone and get it here: fast. Many premium companies offer that service to anyone willing to pay.
Grab a calendar and some markers. Plan out what you need delivered, when you need it, and where its coming from. Mark up a map if that helps. Look for patterns. Do you have 2 shipments coming from about the same spot only a few days apart? Are they full loads or can they be consolidated? Can one vehicle do a “milk run” and pick things up alone a route?
A warning from a trap that I’ve fallen into before. As we order materials, it’s easy to think that ordering excessive inventory is worth it because it brings down the overall freight % (many savvy vendors will offer freight incentives for bigger loads). This can be a trap that results in more inventory than yon can use. Over-inventory leads to a host of other issues, which we’ll cover in another blog post.
Double-Handling:
We’ve all heard the term. More than just a nuisance, double-handling can do real damage to the bottom line. Every time we move materials, think of the time required to do so as being added on to the cost of the material. If a $100 item costs about $2 to move, and we move it 5 times, we’ve just added 10% onto the cost of the materials. That can be a company’s entire profit margin!
Double-handling invites shrinkage. Every we move something, there’s a chance of damaging it, which, if it’s a product for resale, will diminish or even obliterate its value.
Take time to plan. Before your materials arrive, identify where they’ll go (as close to where they’ll be utilized as is feasible), and make room for them ahead of time. Try to put the materials in a place where they won’t need to be moved until they’re called upon to play their role in maintaining the health of the company.
