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Lean Warehousing

Lean Six Sigma Tools

Pareto Analysis
Spaghetti Map
Process Flow Map

  1. This valve manufacturer produced a semi-finished product that its customer final assembled / packaged for their original-equipment-manufacture (OEM) and distributor customers. The final assembly/packaging was being transferred to the valve manufacturer. Instead of producing 200 stock-keeping-units (SKUs) in larger lot sizes they would be producing and shipping over 1800 SKUs in quantities as small as 1 valve.
  2. We knew that we would have to stock valves. The first question was what needed to be stocked and in what configuration. SKU Warehouse Presentation.
  3. From the Pareto chart on slide 1 we determined that the top 54 valves would be stocked in finished goods form. In addition, the very best sellers would be stocked in the easiest-to-reach location.
  4. The second Pareto chart (slide 2) considered how the semi-finished valve-families would be stocked. The semi-finished valve-families had to be final assembled/packaged prior to shipping. The best semi-finished valve-families would be stocked in the easiest-to-reach locations near the final assembly/packaging area.
  5. Next we conducted a Spaghetti-Map analysis to determine the existing state of these operations. Slide 3 shows the how the company was operating to fill these orders before we engaged in this project. The area you see on slide 3 is about 200 x 300 feet. You are seeing one order for about 24 valves being assembled and packaged. This certainly made the case that we need to make changes in the layout.
  6. Inventory and tools were consolidated in the lower section of the slide in a self-contained operation (see slides 4 and 5). The operator has all the tools she needs and pulls the inventory from an area directly around her workstation.
  7. Lastly we mapped the scheduling and paperwork process to find non-value-added steps within the business process. Slide 8 shows that in this relatively small process we found 7 steps that could be eliminated to improve office and warehouse labor productivity.

Lessons Learned

I think this this project, as much as any I have done in the last few years, shows how we can use relatively simple Lean and Six Sigma tools, in combination, to make dramatic improvements.