A Lean Logistics Framework: A Case Study in the Wood Fiber Supply Chain

Abstract

There are opportunities for improvement within the wood fiber supply chain. A significant amount of these opportunities are related to waste reduction. The body of literature focuses on what are the causes of waste and supply chain inefficiency. Conclusions suggest this is partially due to improper supply chain management and collaboration. There is a gap within the research regarding applications of lean tools in the wood fiber supply chain, especially tools that help suppliers and consumers work together to reduce waste. A value stream map (VSM) tool that focused on identifying lean waste in logistic operations was developed and applied. The VSM for the paper mill case study includes three processes: supplier, transportation to the wood yard, and receiving operations at the wood yard (consumer mill). Once the tool was applied, the following cost reductions were projected: the inbound logistics cost was reduced from $2.8 million to $2.3 million and the inventory carrying cost was reduced from $98,400 to $79,600 annually. The possible annual savings reported totaled $320,000 approximately by the introduction of lean principles that reduce the waste in transportation and carrying cost.