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How to reduce waste with lean logistics

Patrick Van De Vyver | 06. Jun 2019
4 minutes read

During the World Economic Forum 2019 in Davos, Sir David Attenborough urged us all to “stop wasting”.

More than 20 years ago, the European directive on packaging and packaging waste established a framework to ensure that countries and enterprises would reduce the packaging waste and started focusing on recycling. Subsequently, our EU companies establish yearly plans on further controlling and minimizing the packaging waste. It was adopted in 1994 and is reviewed every 10 years. Substantial progress has been made. However, there is still much that can and need to be done in this area.

  

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Where should we focus next to make even bigger improvements in waste reduction?

The answer is transportation. On average, the transportation cost is 6% of COGS (Cost of Good sold) for companies. Transportation has a serious effect on profits/loss, emissions, road congestions, and human health. Still, no EU directives have been developed for this, similar to the one on “packaging and packaging waste” from 1994.

We are transporting enormous amounts of waste. This waste is somewhat ‘invisible” as it represents the “air” inside trucks, containers and even within the “packages” which are being transported across Europe.

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Why are we wasting so much?

The answer is simple: The customer is KING. The sales targets have to be met and the customers are demanding very short lead-times and "Just In Time” deliveries. Additionally, leaders around the world have not put enough emphasis on transportation and they do not see the possibilities for improvements that lie in this area. The most important thing is just that the deliveries are delivered on time and that the customers are happy, right?

The truth is that we often do not know when the customer actually needs the goods and that we have standard delivery processes treating all the deliveries in the same way.

Start looking for transportation waste that is all around us! When you see the following, be alerted :

  • When trucks leave your premises and space is visible above the goods. Even when the maximum weight has been reached, heavier products can be combined with lighter products.
  • When trucks/containers are unloaded and left empty while other trucks/containers come and pick up other materials.
  • When urgent deliveries are sent to a warehouse instead of the final customer. This is unnecessary and creates inefficiencies.
  • When substantial volumes are expedited where the normal daily consumption is substantially lower.
  • When deliveries are not consolidated with other deliveries (potentially from other suppliers). By driving around with a half-empty truck, with deliveries only from one producer, we do not fully utilize the resources at hand.

 

What can MIXMOVE do to help in reducing transportation waste?

We want to unblock these inefficiencies that occur in logistics on a daily basis. MIXMOVE lets your factories and distribution centers focus on the products to be shipped rather than the packaging of “customer consignments". Our software enables to handle the cargo at the carton (handling unit) level and mixes thousands of cartons together inside one truck/container, ignoring the “substitution of the final customer delivery”. This ensures that you can load up to +90% of the truck volume capacity. The parcel delivery carriers already do this kind of loading. MIXMOVE enables “bigger deliveries” to be loaded in a similar way.

By splitting up “urgent- expedite” parcels and groupage, the deliveries will ensure that your customer expectations are met dynamically. Consolidation is one of the main keywords when we are talking about reducing waste in logistics. We need to consolidate transportation flows together and track and trace the deliveries, creating dedicated linehauls.

There is also a need for collaboration between companies to ensure optimized transportation without having to worry about “cartel legislation”. MIXMOVE can connect the different transportation legs, enabling full visibility, identifying discrepancies and automate administration.

We also enable “city distribution hubs” to consolidate deliveries from many different companies for the inner city areas, minimising the number of trucks inside city centers. With the most optimal, environmentally friendly transportation method, creating a more sustainable environment for everyone.

 

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