In 2012, Panalpina’s Logistics division embarked on a quest to incorporate lean principles into its global operations. In contrast to other logistics companies who adapt the lean approach to suit the logistics industry, Panalpina decided to change its business model to adapt to lean principles. The result is what Panalpina calls ‘real lean’.
“Panalpina has developed a whole new way of working in logistics where it operates like a manufacturer and runs its facilities like factories,” says Prof Peter Hines of SA Partners, who has worked closely with Panalpina to develop the new approach. “The key to the success of this new way of working is involving and educating its global workforce to ensure that everyone contributes – and its training program is at the heart of this.”
Panalpina’s latest lean achievement is receiving Lean Competency System (LCS) accreditation for its global training program. The LCS was developed by Cardiff University’s Lean Enterprise Research Centre based at Cardiff Business School. This gives Panalpina’s training program endorsement from the very highest level.
The introduction of a lean model has impacted every area of Panalpina’s work. Recent changes range from the complete re-design of layouts and processes to increase capacity, in some cases by more than 200%, to developing ways to capture and implement small improvements generated by front-line staff.
“We want our staff to challenge how we work and make suggestions – big or small – to help us constantly improve,” says Andrew Lahy, globally responsible for continuous improvement within Panalpina’s Logistics division. “By asking the simple question ‘What can be done to make your life easier?’ we promote company-wide involvement that has quickly gained momentum.”
With more than 200 hundred logistics facilities located around the world, Panalpina knows that communication and training is vital to the success of its lean ambitions. The company started by creating the LogEx (Logistics Excellence) initiative to improve profitability and to turn around operations that require assistance. LogEx involves all of the 70 countries where the company has its own operations. The initiative relies on the whole organisation pulling together to ensure its strategic goals are supported and executed locally. Each facility adopts the global lean strategy and tailors it to suit their local needs.
Once the local site strategy is developed, workshops are held and a comprehensive training program is developed, with a focus on achieving the strategic objectives of the site. The training program is managed through PanAcademy, Panalpina’s online training tool, and makes use of internal and external coaches to ensure that employees get the support and training they need to achieve the objectives.
On completing the training and delivering a successful lean improvement, employees then receive one of seven levels of certification from Cardiff Business School. With this approach, Panalpina has launched over 350 lean projects around the world, with more than 125 people taking the initiative to lead projects.
Panalpina’s overall logistics strategy is to move products quickly, not store them, to help customers reduce their inventory levels and increase speed to market. The company therefore has a particular focus on the fast moving fashion and technology industries whose supply chains benefit the most from such work.
“Incorporating lean from manufacturing into the logistics industry was a challenge but we’ve found a way,” says Mike Wilson, Panalpina’s global head of Logistics. “We have already seen some excellent improvements at our facilities around the world but our work will never finish. Lean is an ongoing process and so is our desire to create ever-more efficient supply chains for our customers.”
With more than 200 hundred logistics facilities located around the world (depicted: São Paulo, Brazil), Panalpina knows that communication and training is vital to the success of its lean ambitions.
Panalpina has launched over 350 lean projects in Logistics around the world, with more than 125 people taking the initiative to lead projects.
Panalpina wants it staff to challenge how the company works and make suggestions – big or small – to help it constantly improve its Logistics operations.
Panalpina’s lean Logistics initiative relies on the whole organisation pulling together to ensure its strategic goals are supported and executed locally, such as in São Paulo, Brazil.
Notes to the editor:
Lean principles first materialised in the manufacturing industry, The Machine That Changed the World, the definitive literature based on the Toyota Production System launched the whole body of lean thinking, and one of the leading academic institutions pioneering lean principles was Cardiff Business School with Professor Dan Jones, one of the co-authors of the book, laying the foundations for the Lean Enterprise Research Centre (LERC). Mike Wilson, Panalpina’s global head of Logistics completed his MBA at Cardiff in 1993, when the groundswell of lean was gaining momentum, so it is no coincidence that Panalpina has set up a strategic partnership with Cardiff University both in the area of lean expertise and with research programs developed around ‘Demand Driven Inventory Dispositioning D2ID’.
For a video of Panalpina’s new Logistics Manufacturing Services (LMS) click here.