Lean logistics: how to increase the efficiency of logistics operations

Globalization and digital transformation are redefining modern logistics and placing new demands on companies. Logistics operators today face the challenge of managing an ever-growing number of smaller transactions, handling and storing increasing volumes of products, providing more personalized services, and managing increasingly complex international flows. They must do all this while operating with fewer resources and reducing lead times and errors.

In such circumstances, lean logistics emerges as a pivotal model for achieving operational excellence. Based on the principles of Kaizen and lean, this approach eliminates waste and increases supply chain efficiency, ensuring that the flow of materials and information responds quickly and sustainably to customer needs.

This article will explore the fundamentals of lean logistics, including its key principles, tools, and practices for optimizing logistics processes. Additionally, it will analyze the role of innovation, digitalization, and sustainability in creating resilient, competitive, and forward-looking supply chains.

What is lean logistics

Lean logistics applies the principles and tools of Kaizen and Lean to the design and management of logistics flows. The central goal is to create more agile, flexible, and efficient operations by reducing supply chain waste and ensuring the right product reaches the right place at the right time—at the lowest possible cost.

Defining lean logistics

In practice, lean logistics involves redesigning and managing processes to eliminate waste, reduce waiting times, and optimize transportation and inventory. The focus is on ensuring that every activity adds value to the customer and avoids redundant or inefficient operations.

This approach transforms the supply chain into an integrated, agile, and resilient network capable of responding quickly to demand fluctuations. At the same time, it fosters a culture of continuous improvement and supports long-term operational excellence in a sustainable way.

Principles of lean logistics

Lean logistics is guided by core principles that drive process transformation:

• Creating customer value: every activity must focus on meeting customer needs and improving their experience.
• Flow efficiency: eliminating waste such as excess logistics, idle materials, waiting times, unnecessary movement, overprocessing, and defects or errors.
• Gemba focus: going to the place where the work happens to identify real problems and improvement opportunities.
• People engagement: empowering team knowledge and encouraging active participation in problem-solving and implementing improvements.
• Visual management and data-driven decisions: using visual tools and objective metrics to make performance transparent and support fact-based decision-making.

Objectives and benefits of lean logistics

Adopting lean logistics practices generates benefits across the entire value chain:

• Lower operating costs by eliminating waste and improving flow and resource efficiency.
• Reduced inventory without compromising product availability, freeing up capital and physical space.
• Greater flexibility and agility to respond to demand fluctuations and market changes.
• Improved service levels and customer satisfaction through faster, more reliable, and better-aligned deliveries.
• Sustainability by reducing energy consumption, unnecessary transportation, and material waste.
• Continuous improvement culture that engages the entire organization in pursuing operational excellence.

Improving logistics processes

Continuous improvement is the foundation of lean logistics. The goal is to eliminate waste, increase flexibility, and create flows that deliver customer value more efficiently. To achieve this, specific methodologies and tools are used to redesign logistics processes end-to-end.

Figure 1 – Areas for improvement in external logistics

Value stream mapping in logistics

Value stream mapping in logistics is a key tool for understanding how materials and information flow throughout the supply chain. It helps identify waste and bottlenecks, serving as a foundation for redesigning faster, more efficient processes.

In logistics, this Value Stream Analysis (VSA) is typically approached from two main perspectives:

• Warehouse VSA: focus on internal flows of receiving, storage, preparation, and shipping.
• Transportation VSA: focused on external transportation flows and related operations.

The analysis begins with setting clear objectives and mapping the current state. Next, logistics performance metrics are reviewed to identify improvement opportunities. Based on these insights, improvement initiatives are discussed, and the future-state vision is developed. The process concludes with a cost-benefit analysis and the creation of an implementation plan for the proposed vision.

Warehouse design and storage optimization

Just as production lines in a factory are designed to optimize flow, warehouse layouts must follow the same logic. The goal is to define the best organization and integrated management of material and information flows to ensure operational efficiency.

This is achieved by applying a set of fundamental warehousing principles:

• Value stream-based organization: structuring the warehouse around value streams by using dedicated spaces and equipment, eliminating long travel distances and empty returns.
• Flow-oriented layout: designing the space to minimize movement and promote continuous flow.
• Location by rotation: storing materials based on usage frequency to speed up access.
• Optimized location management: defining storage zones according to specific criteria to improve picking and replenishment efficiency.
• Standardized packaging quantities: optimizing and standardizing unit volumes to simplify handling and picking.
• Standardization and visual management: using standards, signage, and visual systems to make processes more transparent.
• Operational and error control: planning resource allocation, balancing workloads by cycle, and continuously monitoring performance indicators.
• Safety and ergonomics: creating a safe work environment tailored to operator needs, reducing risks, and boosting productivity.

By applying these principles and selecting appropriate storage systems, lean warehousing increases warehouse efficiency by reducing waste, optimizing physical space, and improving responsiveness to customer needs.

Inbound flows: receiving and storage

Inbound flows include all activities related to bringing materials into the organization—from supplier delivery to storage. Applying lean warehouse management at this stage is essential to eliminate waste, reduce costs, and ensure materials reach their point of use at the right time.

Improvement opportunities include:

• Receiving: using side loading/unloading, leveling inbound shipments, and transporting materials directly to the point of use to avoid unnecessary movement.
• Sorting with inspection: enhancing quality control, eliminating redundant inspections (by shifting responsibility to the supplier), and implementing practices like logistics cross-docking, which allows materials to move directly to the next step without being stored.
• Storage: eliminating repacking operations, clearly separating picking and replenishment zones, and implementing standardized work to ensure consistency and efficiency.

In addition to internal operations, inbound flow efficiency also depends on external factors such as transportation frequency and supplier collaboration. Consolidated routing helps optimize transport, reduce costs, and improve sustainability. Meanwhile, supplier collaboration—through sourcing strategies, knowledge sharing, and quality control mechanisms—strengthens the overall supply chain.

Outbound flows: picking and shipping

Outbound flows include all activities related to the movement of finished products—from order preparation to final delivery to the customer. Applying Lean practices at this stage ensures greater reliability, lower costs, and higher service levels—all critical to customer satisfaction.

Key improvement opportunities include:

• Picking: clearly separating replenishment and order preparation areas, applying standardized work, and eliminating unnecessary movements to boost productivity.
• Quality control and repacking: eliminating redundant checks, taking advantage of cross-docking whenever possible, improving sourcing solutions, and reducing repacking operations, which generate additional costs and delays.
• Loading: using side-loading to reduce operation times, leveling shipping activities to avoid workload peaks, and using direct transport from the point of use to the customer.

As with inbound flows, external factors also influence outbound efficiency. Managing transportation timing and frequency allows route optimization and better resource utilization. Collaboration with customers—through sourcing strategies, knowledge sharing, and joint quality control mechanisms—strengthens commercial relationships and ensures deliveries are more aligned with actual needs.

By addressing these areas, outbound flows become faster, more cost-effective, and more reliable, contributing to the overall efficiency of the supply chain.

Milk run: standardized external logistics

The milk run is a logistics replenishment method in which a carrier follows scheduled routes to pick up or deliver materials at multiple locations, ensuring greater efficiency and consistency in the supply flow. The term originates from traditional milk delivery routes that operated on a predictable, reliable basis.

The main objective of the milk run is logistics optimization—ensuring more efficient transportation, reducing waste, and improving synchronization between suppliers, warehouses, and production lines.

Key principles and benefits include:

• Standardized, dedicated routes: scheduled with reliable timing to eliminate uncertainty and delays.
• High delivery frequency: enables multiple daily replenishments, ensuring short replenishment cycles.
• Inventory reduction: materials are delivered to the point of use in short, regular, and predictable cycles, lowering stock levels.
• Efficient vehicle capacity utilization: reduces transportation costs by increasing load efficiency.
• Standardized work: clearly defined routes, procedures, and responsibilities ensure operational consistency.

Within a Lean supply chain, the milk run helps align supply with actual demand, increasing flexibility, lowering costs, and reinforcing milk run logistics as a key continuous-improvement practice.

Full pull planning

Full pull planning is one of the core pillars of lean logistics and inventory management. Unlike the traditional push model—which relies on forecasts to drive production and shipping—pull planning is based on actual customer demand, aligning all logistics flows with real consumption.

In practice, full pull planning:

• Starts with customer orders, not forecasts—ensuring that only the necessary materials are moved.
• Uses supermarkets to regulate material flow, enabling continuous and reliable replenishment.
• Optimizes flow by reducing inventory levels, shortening lead times, and increasing process visibility.
• Follows clearly defined standards, ensuring consistency and operational stability.

Pull-based logistics loops ensure that every link in the supply chain (supplier, manufacturer, distributor, retailer) responds in sync with real demand. Materials are replenished only when they reach a predefined reorder point—calculated based on consumption during the lead time and the required safety stock.

Key benefits of pull planning include:

• Lower inventory levels and reduced working capital tied up in stock
• More reliable replenishment cycles, with frequent, leveled deliveries
• Real-time visibility and control, enabling faster and more informed decision-making

In summary, applying pull flow principles transforms the supply chain into an agile, efficient, and customer-driven network—eliminating waste and enhancing operational resilience.

KPIs for supply chain optimization

Performance measurement is essential for improving logistics and enhancing supply chain efficiency. Logistics KPIs make it possible to monitor operational quality, identify waste, and guide continuous improvement decisions. These indicators are typically grouped into two main categories: warehouse and transportation.

The main indicators used to evaluate the efficiency and quality of warehouse operations include:

• Productivity – measures the number of pickings per worker (e.g., boxes/hour, order lines/hour).
• % of ground-level picking – tracks the percentage of picking done without reaching or lifting, indicating ergonomic efficiency and waste reduction.
• Service level (%) – measures penalties due to missed deliveries, errors, or customer complaints.
• Warehouse denials – counts unavailable or defective products in the warehouse.
• Unshipped order lines – number of customer order lines that were not dispatched.
• Picking error – materials shipped incorrectly.
• Damage ratio – percentage of damaged goods delivered to the customer.
• Over/under shipment lines – measures discrepancies between shipped and ordered quantities.
• Inventory discrepancies – differences between theoretical and actual stock levels.
• Workplace accidents – number of accidents and their severity.

In transportation, indicators allow for the assessment of efficiency, reliability, and costs associated with the movement of goods. Among the most relevant are:

• Vehicle load rate – measures how efficiently vehicle capacity is used.
• On-time delivery rate – percentage of deliveries made within the agreed time window.
• Transportation cost per unit – cost per pallet, ton, or order.
• Transportation lead time – time between pickup and final delivery.
• Return rate due to transport failures – percentage of returns caused by delays or delivery errors.
• CO₂ emissions per kilometer/ton – environmental indicator tied to transport sustainability.

The use of visual management boards and digital dashboards, along with frequent review meetings, ensures team alignment, enables quick responses to deviations, and supports the foundation of continuous improvement.

The role of innovation and digitalization

Digital transformation is reshaping logistics operations. The adoption of new technologies provides greater visibility, integration, and speed in decision-making, making it one of the most critical drivers of supply chain efficiency.

Key innovations include:

• IoT (Internet of Things) and smart sensors, ensuring continuous traceability and monitoring of materials and products.
• Artificial intelligence and advanced analytics, optimizing route planning, demand forecasting, and capacity management.
• Collaborative platforms, enabling seamless information sharing among suppliers, logistics providers, and customers.
• Blockchain and traceability solutions, increasing transparency and reducing the risk of failures or fraud.
• Logistics process automation, including AGVs, picking robots, and automated storage systems.

When combined with Lean thinking, digitalization enables a more agile, resilient, and sustainable supply chain, ensuring that logistics processes keep pace with market shifts and rising customer expectations.

Long-term sustainability and efficiency

The application of Lean logistics principles goes beyond cost reduction and short-term operational improvement. When effectively structured, Lean logistics plays a critical role in achieving long-term efficiency and driving sustainability across the supply chain.

By eliminating waste, reducing unnecessary transportation, optimizing inventory, and improving resource utilization, Lean logistics delivers not only economic gains but also environmental and social benefits. Key impacts include:

• Lower carbon footprint, through route optimization and load consolidation.
• Reduced resource consumption by minimizing excess inventory, unnecessary packaging, and redundant operations.
• Increased logistics system longevity, through standardized, transparent, data-driven processes.
• Stronger supply chain resilience, better preparing the organization to handle disruptions and demand fluctuations.

Furthermore, integrating digital innovation with Kaizen and Lean methodologies amplifies these results—creating value chains that are more agile, transparent, and sustainable. This allows organizations to enhance their competitiveness while taking an active role in the transition toward a more responsible, future-ready economy.

Conclusion: the future of lean logistics

Lean logistics is increasingly recognized as a model of excellence for companies seeking competitiveness, agility, and sustainability. By embracing Kaizen and Lean principles and investing in supply chain management capabilities, organizations can consistently improve logistics processes and deliver greater customer value.

The convergence of Kaizen Lean practices and digital innovation will shape the future of logistics. Technologies such as artificial intelligence, IoT, automation, and blockchain will enhance visibility, accuracy, and resilience across supply chains. At the same time, growing pressure for more sustainable business models will require solutions that balance efficiency with environmental and social responsibility.

Organizations that adopt Lean supply chain management will be better equipped to navigate uncertainty, adapt quickly to market changes, and maintain a lasting competitive advantage. The path forward involves transforming logistics into a strategic engine for competitiveness.

Still have questions about Lean Logistics?

What Is Just-in-Time (JIT) logistics

Just-in-Time (JIT) logistics is an approach focused on delivering materials and products at the exact moment they’re needed, in the right quantity and at the right location. Instead of maintaining high inventory levels, JIT logistics aligns supply flows with actual demand—reducing stock and lead times and minimizing waste.

What is capillary distribution?

Capillary distribution typically refers to the final stage of logistics, also known as the “last mile”, where products are delivered directly to the end customer. This stage involves breaking down large volumes into smaller routes to reach multiple destinations.

In Lean logistics, this approach promotes faster order fulfillment, closer proximity to the customer, and reduced transport waste. It’s essential across sectors such as e-commerce, food and beverages, and pharmaceuticals.

What are the primary warehouse operations?

Warehouse operations include all the activities required to receive, store, prepare efficiently, and ship materials. The main steps are:

1. Receiving – unloading, inspecting, and registering materials.
2. Locating – identifying and moving materials to storage locations.
3. Storing – using the appropriate strategies and equipment to optimize space.
4. Picking – selecting and replenishing items, supported by specific systems and methods.
5. Preparing – packing, labeling, and organizing items for shipping.
6. Shipping – loading, documenting, and updating outbound records.
7. Cross-docking – directly transferring inbound goods to outbound delivery without intermediate storage

When optimized through Lean principles, these operations help reduce waste, increase productivity, and improve warehouse efficiency.