Building a lean Fulfillment Stream

Robert Martichenko and Kevin von Grabe

Shingo Research and Professional Publication Award recipient

BUILDING A LEAN FULFILLMENT STREAM will change the way you think about your supply chain and logistics networks. Even better — it gives you a way to act using lean principles to transform and continuously improve these two key flows. This workbook demonstrates how lean logistics increases value while reducing costs.

In this pioneering workbook, lean logistics veterans Robert Martichenko and Kevin von Grabe explain step-by-step a comprehensive, real-life implementation process for optimizing your entire fulfillment stream from raw materials to customers, including practical insights into two critical concepts: calculating the total cost of fulfillment and collaborating across all functions and firms along the fulfillment stream.

Your company, like most, probably calculates costs at different points within departments, such as the piece price paid by the purchasing department to a supplier. Few companies figure the total cost associated with each major function across the whole supply chain model. Calculating total cost, which most executives find surprisingly large, lets you measure the impact of your improvement efforts on operational performance and overall income.

Martichenko and von Grabe also give you guidance and tools for collaboration. Using the example company ABE Corp. as their model, the authors illustrate how the lean conversion process is a win-win for every company along the supply chain. And an accompanying analysis illustrates the financial benefits and shows you how to apply the metrics.

The narrative, supported by 41 charts and illustrations, including value-stream maps, shows you:

• How to apply the eight guiding principles for implementing lean fulfillment, even when all the data and variables are not known.
• The seven major types of waste in logistics and supply chains.
• How a fulfillment-stream council of representatives from internal departments, customers, suppliers, and transportation providers gives critical guidance and support.
• The "eight rights" for assessing perfect order execution.
• What lean metrics to use, such as why average days on hand of inventory is a better measure than inventory turns.
• How to identify and eliminate waste in shipping, receiving, and yard management.
• Learn how to use lean management principles to convert supply chains and logistics networks into smooth, fast-flowing fulfillment streams.

Lean Enterprise Institute Inc. 2010