Lean Road Transportation – a systematic Method for the Improvement of Road Transport Operations



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Lean Road Transportation – A Systematic Method for the Improvement of Road Transport Operations


1st Author

Prof. Dr. Bernardo Villarreal

Departamento de Ingeniería, Universidad de Monterrey, I. Morones Prieto 4500 Pte., San Pedro Garza Garcia, NL 66238, Mexico

E-mail: bernardo.villarreal@udem.edu

2nd Author and Corresponding

Dr. Jose Arturo Garza-Reyes*

Centre for Supply Chain Improvement

The University of Derby

Kedleston Road Campus, Derby, UK, DE22 1GB

E-mail: J.Reyes@derby.ac.uk

Tel. +44(0)1332593281



3rd Author

Dr. Vikas Kumar

Bristol Business School

University of the West of England

Coldharbour Ln, Bristol, UK, BS16 1QY

E-mail: Vikas.Kumar@uwe.ac.uk

Tel. +44(0)1173283466



* Corresponding Author

Lean Road Transportation – A Systematic Method for the Improvement of Road Transport Operations

Abstract
Road transportation has become an important factor in international trade and the management of supply chains. However, this form of product logistics has generally been considered inefficient. Traditionally, practical inefficiencies of road transportation have been addressed through mathematical modelling, operations research-based methods, and simulation. This paper presents an alternative systematic approach to improve road transport operations based on lean thinking and the reduction of the seven transportation extended wastes (STEWs). To do this, the paper reviews the extant literature in the area of lean road transportation, providing a structured research definition of the application of lean thinking in road transport operations and hence guidance on the limited research conducted in this field. The systematic lean transportation method is then presented and empirically tested through a case study in a Mexican firm. The results obtained from the case study indicate that the proposed systematic lean method is an effective alternative for the improvement of road transport operations, with the number of distribution routes and distance travelled being reduced by 27% and 32% respectively. The proposed method can be used by organisations as a guide to help them improve their road transport operations. In addition, the paper’s aim is to contribute by stimulating scholars to further study the application of lean thinking and waste reduction in road transport operations.
Keywords: Lean, road transportation, transportation efficiency, value stream mapping, waste elimination.


1. Introduction
Freight transportation by road has become an important element of international trade and supply chain performance. For example, according to the US Department of Transportation (2011), 68% of the total tonnage moved in the United States in 2010 was done by truck, whereas 29% of the ton-km of this country’s trade with Mexico and Canada was also moved under this mode of transportation. Similarly, the Mexican Transportation Secretary informed that in 2013 about 75% of total ton-km was carried out by trucks (Subsecretaría de Transporte, 2013). The European Commission reported in 2008 (European Commission, 2011) that the European Union moved 27% of its ton-km by truck. However, despite its importance, road transportation has traditionally been stated as inefficient in Europe (McKinnon et al., 1999; Swedish Association of Road Haulage Companies, 2008), US (Belman et al. 2005; US Department of Transportation, 2009) and Mexico (Instituto Mexicano para la Competitividad, 2004). To address the practical inefficiencies of road transportation, Sternberg et al. (2013) suggest that researchers have traditionally approached the improvement of road transport operations through mathematical modelling (e.g. Ghiani et al., 2003; Laporte, 1992; Hill and Benton, 1992; Bodin et al., 1983), operations research-based methods that include stochastic programming (e.g. Gendreau et al., 1996), genetic algorithms (e.g. Baker and Ayechew, 2003), heuristics approaches (e.g. Boudia et al., 2008; Pisinger and Ropke, 2007), among others, and simulation (e.g. Osorio and Bierlaire, 2013; Kuo, 2010). Under these approaches, various classical problems have been addressed. For example, the vehicle routing (e.g. Jemai et al., 2013; Kumar et al., 2012; Boudia et al., 2008; Chiu et al., 2006; Zhong et al., 2007), vehicle scheduling (e.g. Zhang et al., 2014; Eliiyi et al., 2009), and transportation problems (e.g. Yu et al., 2015; Lau et al., 2009), among others. These works have been mainly focused on optimising resource utilisation (e.g. Chiu et al., 2006; Zhong et al., 2007; Eliiyi et al., 2009), routes (e.g. Lau et al., 2009; Jemai et al., 2013), cost (e.g. Boudia et al., 2008; Eliiyi et al., 2009; Yu et al., 2015), time (e.g. Chiu et al., 2006; Zhong et al., 2007; Zhang et al., 2014; Yu et al., 2015) and distance (e.g. Zhang et al., 2014). However, the improvement of the actual road transportation operations to gain efficiency has rarely been studied (Fugate et al., 2009).

In the last decade, however, an alternative movement to improve road transport operations has emerged. This movement represents an extension of the lean production approach that advocates the application of its principles and tools to road transport operations. Since unnecessary costs and significant waste exist in most transportation networks (McKinnon et al., 2003), the “lean road transportation” movement is based on improving road transport operations by identifying and eliminating relevant wastes, also known as “non-value added activities” within the lean terminology. However, research on the application of lean thinking in the road transportation sector is scarce (Villarreal et al., 2009). It has been mainly limited to the definition of road transportation wastes (Sutherland and Bennett, 2007; Guan et al., 2003; Sternberg et al., 2013) as well as the development of lean performance measures (Guan et al., 2003; Simmons et al., 2004; Villarreal, 2012; Taylor and Martinchenko, 2006) and methods (Hines and Taylor, 2000; Villarreal et al., 2012; Villarreal, 2012; Villarreal et al., 2013) to assess performance and eliminate waste. Therefore, to complement and support the very narrow body of knowledge on lean road transportation, this paper presents a systematic method for improving road transport operations based on the elimination of the Seven Transportation Extended Wastes (STEW) proposed by Sternberg et al. (2013). This study also reports the implementation of the proposed method in the distribution network of a large Mexican organisation.



The rest of the paper is organised as follows: Section 2 provides a brief review of the main streams of research on lean road transportation; a description of the method proposed in this paper to improve road transport operations is outlined in Section 3, whereas its application is undertaken in Section 4; Section 5 discusses the results of the case study; and Section 6 presents the conclusions, limitations and future research opportunities derived from this research.
2. Literature Review
The lean philosophy considers transportation as waste (Womack and Jones, 2003). However, in the current globalised market, transportation is a necessary activity to deliver goods to customers. In fact, transportation can nowadays be considered as a differentiating factor that adds service value to customers (Villarreal et al., 2009). Thus, a line of academic research has been devoted to transfer the application of lean principles and tools to improve road transportation, particularly, through the elimination of waste. This research line has been conducted through three main streams as illustrated in the concept map in Figure 1.

Sternberg et al. (2013); Sutherland and Bennett (2007); Guan et al. (2003)

Section 2.1


Villarreal (2012); Taylor and Martinchenko (2006); Simmons et al. (2004); Guan et al. (2003)


Villarreal et al. (2013); Villarreal et al. (2012); Villarreal (2012); Hines and Taylor (2000)




Section 2.2




Section 2.3




Figure 1. Concept map showing the different research streams of the lean road transportation area


2.1 Definition of road transportation wastes

Waste elimination is an important aspect of the lean concept (Pettersen, 2009) to increase value for customers (e.g. Bicheno, 2004; Dennis, 2002) and reduce costs (e.g. Monden, 1998; Ohno, 1988). Hence, researchers such as Guan et al. (2003), Sutherland and Bennett (2007), and Sternberg et al. (2013), realised the potential of adapting and using a classification of waste, departing from the seven wastes as defined by Toyota (Ohno, 1988), for the specific application to road transport operations. Villarreal et al. (2009) suggested this as one of the main research streams in the area of lean road transportation, see Figure 1. In particular, Sutherland and Bennett (2007) defined what they called the “Seven Deadly Wastes of Logistics” (i.e. overproduction, delay/wait, excess transport/conveyance, motion, inventory, space and errors). According to their study, these wastes keep supply chain management away from achieving its full business potential. Similarly, Sternberg et al. (2013) developed a waste framework, for motor carrier operations, which intends to provide a structured framework to identify, classify and understand inefficiencies in road operations. Sternberg et al. (2013) concluded that five, out of the seven Toyota wastes (Ohno, 1988), apply to motor carrier operations, but two do not, namely: waste due to excess inventory and conveyance. Instead, two new waste types were included: resource utilisation and uncovered assignments. Table 1 presents a brief description of the waste framework.


Table 1. Description of seven wastes extended to transport operations (adapted from Sternberg et al., 2013)

Waste

Description

Source

Overproduction

Producing reports no one reads or needs, making extra copies, e-mailing/faxing the same document/information multiple times, entering repetitive information on multiple documents and ineffective meetings

Definition by Tapping and Dunn (2006), confirmed in Sternberg’s et al. (2013) study

Waiting

Employees having to stand around waiting for the next process step, such as loading and unloading, or just having no work because of lack of orders, processing delays, equipment downtime and capacity bottlenecks

Definition from production (Liker, 2004), loading and unloading added as a common cause for waste of waiting noted from Sternberg’s et al. (2013) empirical study

Incorrect processing

Consuming more resources for moving the goods than necessary due to inefficient routing or driving

Definition suggested based on Sternberg’s et al. (2013) empirical study

Unnecessary movement

Any wasted motion employees have to perform during the course of their work, such as looking for information, reaching for, or stacking goods, equipment, papers, etc. Also, walking and extra movement created by sequencing errors is waste. This was found to be synonymous with conveyance

Definition by Tapping and Dunn (2006), movement due to sequencing errors added from the Sternberg’s et al. (2013) empirical study


Defects

Waste caused by repairs, redelivery, scrapping, etc., due to damages on the transported goods or the equipment

Damages to the equipment added to the production definition, in alignment with the Sternberg’s et al. (2013) empirical study

Resource utilisation (New)

Waste due to excessive equipment and bad resource planning

Definition suggested based on Sternberg’s et al. (2013) empirical study

Uncovered assignments (New)

Carrying out unprofitable transport work due lack of information or planning

Definition suggested based on Sternberg’s et al. (2013) empirical study

Excess inventory & Conveyance

Not applicable

Not reported in the empirical study

Furthermore, based on an extended version of Overall Equipment Effectiveness (OEE) (Nakajima, 1988) termed as Overall Vehicle Effectiveness (OVE) (Simmons et al., 2004), Guan et al. (2003) identified five transport losses, or wastes; driver breaks, excess load time, fill losses, speed losses, and quality delays. These studies show that although the identification of road transportation wastes has gained the attention of researchers, it is an area which still requires further investigation.
2.2 Development of lean performance measures for road transportation

Measurement on a continuous basis is crucial to improve operations and supply chains (Cabral et al., 2012; Dey and Cheffi, 2013). In this situation, the application of lean practices to road transportation requires adequate metrics to measure the system’s performance as a basis for continuous improvement. Simmons et al. (2004) proposed OVE for monitoring and improving the performance of truck transportation. OVE is an extended version of the OEE indicator employed by lean to improve equipment effectiveness. A modified version of the OVE measure was then suggested by Villarreal (2012). This is known as Transportation Overall Vehicle Effectiveness (TOVE), which considers total calendar time, instead of loading time, as waste identification and elimination is related to the transportation vehicles utilised to move products. Since vehicles represent a high investment, it is important to keep them in operation at all times (Villarreal, 2012). Figure 2 compares and illustrates the elements of OVE and TOVE, and their related wastes.


Figure 2. Description of OVE and TOVE structure and components

Under this approach, waste elimination is concentrated on achieving the highest truck efficiency, similar to what OEE seeks in production equipment. Thus, operations mapping and waste identification are carried out following the truck. In summary, TOVE consists of four components: administrative availability, operating availability, performance and quality. In this way, TOVE is obtained from the product of these mutually exclusive components. The concept of vehicle administrative availability is important because it has a significant impact on the overall vehicle utilisation and efficiency. It is mainly the result of administrative policies and strategies related to capacity or maintenance decisions.
2.3 Methods to eliminate waste in road transport operations

Unnecessary transportation waste, in many cases, is related to location decisions that seek to optimise performance at individual points of the supply chain. Thus, the solutions suggested for its elimination are normally concerned with the relocation and consolidation of facilities, a change of transportation mode, or the implementation of milk runs. However, according to McKinnon et al. (1999) and Fugate et al. (2009), eliminating unnecessary transportation can also be achieved by increasing transport efficiency. In this case, Hines and Taylor (2000) developed a four stage methodology to eliminate waste in transportation processes. Villarreal et al. (2009) applied this methodology to the distribution of frozen goods of a Mexican company leader in the production and distribution of frozen and refrigerated products. This resulted in an improved capacity utilisation and availability of vehicles, which helped this company to save about 12.3 million pesos (approximately £0.55 million) in future budgeted investment.

Villarreal et al. (2012) also proposed a comprehensive scheme to integrate the traditional operations research approach of developing algorithms to achieve an optimal solution to the vehicle routing problem with the Just-in-Time approach of milk runs to identify and reduce waste. Additionally, Villarreal (2012) adapted Value Stream Mapping (VSM), which he called Transportation Value Stream Mapping (TVSM), to support efficiency improvement programmes in transport operations. Later, Villarreal et al. (2013) developed a scheme around a modified version of the OEE metric. This index was adapted to be used as the main performance measure in transport operations to eliminate availability, performance and quality related wastes.

Despite the three research streams and amount of work identified and discussed in this section, research on the development of concepts, methodologies, and applications of lean thinking in the transportation sector, specially road transportation, can still be considered rather limited (Villarreal et al., 2009). Especially when compared with the vast amount of research on lean’s application to other industries such as manufacturing (Taj, 2008), processes (Panwar et al., 2015; Lyons et al., 2013) and services (Sternberg et al., 2013). This paper therefore complements and enhances the lean road research area by proposing a systematic method for improving road transport operations.

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