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How Lean Solutions Provide Value-Added Services to Logistics Companies

Lean isn’t quite as big a buzzword in logistics as it is in manufacturing. After all, it was first introduced as “lean manufacturing” and originated with the Toyota Management System. However, as more lean practitioners and thinkers expanded out of automotive into other industries they knew that the universal principles of lean would work in any environment, especially in logistics. Amazon itself uses many lean principles across the business, which is good enough reason by itself to make any logistics company think about how lean could work for them. Lean could have value in no matter what sector of logistics you operate, but we see specific benefits in using lean for third-party logistics companies offering value-added services.

Why Focus on Value-Added Services?

Third-party logistics went from an innovation twenty years ago to a swamp of competition today. Companies from UPS to your neighbor with garage space offer third-party logistics, so if you’re in this market you must differentiate your offering. Value added services have become part of that differentiation, but it’s a new aspect to the business model that companies are still figuring out how to offer and execute effectively. The easy definition of value-added services is “anything other than moving stuff from A to B”, but specific offerings like kitting, sequencing, subassembly,  and repackaging for order fulfillment are the biggest potential money makers. 

Some definitions:

Kitting – packaging multiple components together for ease of assembly at another location. All of the fun you had putting together the last thing you bought from Ikea is a good example of a kitted product.

Sequencing – repacking many of the same item into a particular order by feature, such as color, coating, or label. Painted parts are a very common example of a sequenced item, where the original packaging would only have one color but a build sequence would have a mix of colors in a specific order. Product would be sequenced and presented to assembly to reduce floor space and error proof the installation.

Subassembly – assembling multiple components to create an item which is a component of a larger product. For example, a rearview mirror, which has the outside plastic case, the mirror, and various mechanisms, is a subassembly that might be completed by a third party and shipped to an automotive assembly plant.

Where Do Lean Solutions Come In?

For services such as subassembly, sequencing, and kitting, the operational requirements are a small scale of everything a standard assembly operation requires. Supply chain, personnel, standard work, material and information flow, production control, scheduling, etc. Specific to the product and process needs, you’ll have an inventory of material stored in racks or carts, movement of materials around the facility on carts, presentation of materials at the station on flow racks, some type of workstations or work cells, and packaging for all of the products. Lean solutions address all of those need areas in a flexible manner to let you keep pace with changing requirements.

If you’re looking to add more value-added services to your offerings, MakitLean workstations and flow racks can enable those processes. Contact us to discuss how our solutions can work for your application.