Making distribution operations lean: the management system approach in a case

Abstract

Purpose The purpose of this paper is to develop a distribution management system that determines the path toward lean distribution through teamwork. This system introduces a set of lean distribution initiatives regarding the structural and strategic facets of organizations. Design/methodology/approach Through studying the case, which is one of the largest distribution companies in the Middle East, the deployment process of the developed system is examined through chartering focus, deployment and operational teams. These teams held several rounds of panel discussions to formulate the strategic, tactical and technical plans required for making distribution operations lean. Findings It is found that the strategic focus of the case should not only be restricted to distribution initiatives but also the company can achieve a suitable competitive position by focusing on leadership and integral architecture of information, distribution and transportation channels. The first semi-year cycle of implementing the lean distribution system in the case targeted a 2.5% reduction in the ratio of distribution cost to sales by planning for the cross-docking adoption. It also aimed at a 10% increase in the market share for the prioritized market by a 20% reduction in lost sales owing to improper implementation of the processes. Originality/value The developed lean distribution management system is novel in the way it includes the strategy, structure and capabilities of an organization. Deploying this system causes a meaningful connection between lean distribution principles and operational initiatives.