What is Lean Freight Management?

Establishing successful change management strategies and sustaining them takes time and resources. When it comes to implementing long-term sustainable improvements, it is often a long road to tread on.
Many businesses aim to balance cost and profitability. To do this, a company may implement different strategies and systems. One of these is lean management.

The idea behind lean is simple: reduce waste and you will increase your bottom line. Lean management, when used in the transportation industry, can help organisations achieve these goals by streamlining supply chain operations.

Whether you want your logistics business to boost customer satisfaction or reduce the amount you spend on freight, lean freight management may be ideal for your business.
But first, what is lean freight management? What are its benefits? This blog is created to help you understand how lean management can help you.

What is Lean Freight Management?

Lean management is an effective method of reducing costs to improve profitability. It is a set of practices and principles aimed at improving the overall operations of a company by increasing efficiency and reliability.

Too often, companies deal with too much waste and inefficiency associated with a large fixed cost of freight and transportation. Lean freight management is developed to optimise shipping operations and handling systems.

Lean freight management represents a new opportunity for the shipping industry. It capitalizes on supply chain and logistics expertise to drive down freight costs without impacting quality.

In simple words, lean freight management is a proven strategy for moving goods efficiently through supply chains.

By implementing lean freight management, a business can improve its customer service, reduce its operating costs, and become more environmentally friendly.

Any company wants to lower freight costs, reduce overheads, increase production efficiency, and ensure better customer service. At a time-challenged age, however, pursuing these goals can be difficult. This is one reason an advanced lean freight management system is essential to a business.

Benefits of Lean Freight Management

When done correctly, lean freight management can have tremendous benefits for your business.

Customer Focused Approach

Any business knows the importance of customer service. One of the many ways to boost customer satisfaction is to implement a customer-focused approach.

In the modern transportation industry, customers have high expectations—safe and swift delivery of goods. Lean logistics requires developing transportation strategies based on customer strategies, and not the other way around like other companies typically follow.

This means that you should design your transportation strategies around customer requirements and optimal inventory levels. Doing so will reduce lead times from order to delivery, which results in improved quality of service and higher customer satisfaction.

By understanding customer expectations and demand, you can also reduce inventory risk and operating costs.

Eliminating Waste

Transportation and delivery offer multiple opportunities for cost reduction.

According to size-based cost efficiency, transporting larger lots is more cost-effective than moving smaller batches of packages. Lean management challenges this popular concept.

Combining many consignments into one large batch may considerably increase the lead time between orders and deliveries. This results in delays and more waiting time for customers, which can negatively impact customer satisfaction.

Remember, transportation primarily manifests as waste when it leads to waiting. In the end, your business suffers.

Lean freight management also streamlines supply chain operations. It emphasises activities that add value instead of wasting time on redundant workflows and manual performance of tasks. However, a smart business understands the difference between waste and backup. You should not cut corners in areas when a redundant backup is necessary.

Moreover, practicing lean logistics means not over-buying trucks and drivers. Instead, it focuses on getting more out of your existing resources.

Productive & Cost Efficient

With so many businesses struggling over the past few years, it’s no wonder that companies are under such pressure to cut costs wherever possible. However, cutting corners in logistics can have a devastating effect on both customer satisfaction and the bottom line.

Lean logistics is an effective way of managing transportation assets so that the supply chain can be kept in the best possible condition.

Generally, lean freight management allows companies to reduce costs by making sure that the production meets the needs of the customers. At the same time, the cost involved in shipping products from the manufacturer to the customer is minimised. Lower freight costs help you control inventory more easily.

Further, lean management focuses on optimising productivity costs because they offer more opportunities for saving money. Examples of productivity costs are vehicle waiting time and total distance covered.

By executing main practices only when demand dictates, your business can save time and overhead costs, such as energy, inventory storage, and labour. This, in turn, will allow you to offer lower prices to your customers while maintaining profitability.

Measurable Performance

Lean management focuses more on measurable improvements than on a preconceived idea or objective.

When done right, it revolutionises how employees think about work. The waste reduction makes processes easier and simpler. And when processes are efficient, achievements become more attainable and employees are more motivated to accomplish things.

Lean logistics provide measurable performance capability through continuous improvement. Continuous improvement can be anything that aims to streamline workflows and reduce waste. A business that adopts lean management follows a specific system for measuring performance.

Cario as Lean Freight Management Software

With so much to gain by implementing lean methods like waste reduction and improved customer service, it’s worth reconsidering your current approach to shipping. You might just see the impact of your actions reflected in the responses of your customers—and that can only mean good things for business.

Investing in Cario, a revolutionary freight management software, can mean cost savings and improved operational efficiency for your business.

In Australia, freight can be complex, costly, vague, or too manual—or all of these. Cario believes freight should be an enabler for your business—not just a cost centre.

As a lean TMS, Cario adapts lean management’s concept of reducing waste, minimising cost, enhancing efficiency, and maximising profits. This all-in-one platform simplifies your supply chain and logistics, enabling you to do more with less.

Contact us now if you want to learn more about how Cario can reduce freight costs and increase your efficiency and productivity.