Lean Beyond Company Borders: Costs or Benefits?

Abstract

Purpose - This paper brings lean principles outside the walls of the factory and applies them to the overall supply chain with respect to transportation in particular. We present a solution that increases trailer density by transporting components hanging on rails instead of piling them up. Design/method/approach - A calculation model, validated by a case study, illustrates the different cost drivers across the supply chain and reveals the savings and investment expenditures of the new concept. Findings - The results from a case study show that smoothening the flow of products between the different supply chain partners and increasing the trailer density by 25% results in a reduction of 20% in transportation costs. Based on three critical product characteristics, multiple products are researched in a 2³ design to gain insights in the market analysis and the practical use. Practical implications - Looking for innovative ways to transport goods can lead to transportation cost savings, new business models and a smoother flow of products. Originality/value - The model contributes to the literature by increasing the transparency about the drivers that influence the costs of the different players in the supply chain. Moreover, the paper shows the financial impact of innovations in transporting and handling components.