Warehouses and efficient storage of inventory are a critical part of every supply chain. Supply Velocity uses Lean Principles, Lean warehouse management, best practices and the most efficient warehouse layout to ensure your warehouse operations are a competitive advantage for your company and your supply chain. When Lean first came to North America and Europe, the focus was on lean manufacturing. However, over the last 20 years warehouse operators have realized that the philosophy of Lean can be applied just as well to their processes. Lean warehousing seeks to continually reduce non-value added steps (muda) in receiving, put-away, picking, packing and shipping of items. In addition, supporting office processes such as order entry, purchasing and accounting should be part of the scope of Lean Warehouse Management. Just like manufacturing, warehouse process flow can be made more efficient by using Lean tools and involving employees to identify and eliminate muda in your distribution center. Ultimately, you will create a culture of continuous improvement.
Lean principles seek to continually reduce muda and standardize best practices.
The most frequently used Lean tools in warehouses are time studies, spaghetti diagrams, quickchangeover and 5S visual management. Time studies and spaghetti maps are used in warehouse layout to improve labor efficiency by minimizing move-time to process orders. Quickchangeover is used to speed up the unloading and loading of trucks to maximize dock capacity and minimize truck downtime. 5S visual management creates disciplined operations by making sure there is a place for everything and everything is in its place. 5S eliminates clutter and ensures materials, information and supplies are easy to find. The steps in 5S are:
- Seiri (Sort)
- Seiton (Set in Order)
- Seiso (Shine)
- Seiketsu (Standardize)
- Shitsuke (Sustain)
Warehouse best practices focus on three areas: 1) having the correct inventory for fulfilling customers’ orders, 2) making sure the right item, at the right quantity is put in the customers’ box, and 3) minimizing movement of warehouse operators. Much of the focus of lean warehouse design is to optimize labor productivity and workflow. Designing racking to efficiently stock pallets, shelving to store small items and floor stock to store stackable SKUs will simplify receiving, putaway and picking. However, other supply chain concerns are inventory management and quality. Inventory optimization should be used to ensure you have the right inventory to balance a high fill rate with the cost of carrying inventory. Quality is an often overlooked aspect of warehouse optimization and Lean warehousing. While quality gets a lot of attention in manufacturing, the direct connection warehouses have with customers should make quality even more important. If you have ever received the wrong item, the wrong quantity or a damaged item you will understand the problems this can cause your customers. In addition, because they think warehouse operations should be simple, customers will not often forgive quality errors.
The traditional 8 wastes of lean are very easy to transfer to lean warehouse projects. Supply Velocity’s lean warehouse methodology teaches our clients on the fundamentals of lean thinking. Lean teams identify Muda (waste) through lean tools to identify overstocking, overproduction, rework, over-processing, transportation, and other non-value-added work.
Warehouse layout is the most visible aspect of Warehouse Optimization and Lean Warehousing. See our Facility Layout summary for additional information on this methodology. By designing a lean warehouse you can improve workflow and material handling, reduce forklift travel and operational costs, thereby improving profitability.