Typically, the warehouse is a nexus of conflicting demands and requirements in the supply chain and logistics industry. That’s why this stage is often a stumbling block in the just-in-time (JIT) supply chain. As such, your warehouse is an excellent starting point to implement Lean principles, according to Paul Myerson (‘Lean Supply Chain and Logistics Management’ (2012), Chapter 8: Lean Warehouse: Low-Hanging Fruit).
Why would you get Lean?
Even if your warehouse seems a paragon of accuracy and efficiency, you might be surprised at the number of opportunities for improvement that you find once you take a closer look. In ’Are Your Warehouse Operations Lean?’ (2006), Ken Gaunt highlights an analysis showing that a typical order was worked on only 38% of its cycle time, leaving it idle 56% of the time, and that for the remaining 6% of the time, the employees working on it dealt with problems such as waiting for equipment, computer issues, interruptions, and blocked aisles.
These are the areas of waste to look for in a warehouse environment, according to Four Principles, Lean management consultants:
Unnecessary internal transport.
Tip: Check to see if you have any fast-moving inventory that is stored in the back of the warehouse and can be rearranged so that the most frequently shipped SKUs are closest to the outbound area.
Activities or errors leading to excess or lack of inventory: misplacing SKUs, poor visibility or inaccurate information in the warehouse management systems.
Tip: The investment in a digital Warehouse Management System (WMS) often pays off quickly, as digital data exchange is a lot more error-proof than manual data entry.
Ergonomics: avoidable walking, reaching or stretching due to inefficient layouts, lack of ergonomic workstations, inefficient manual picking, picking trails that are far from optimal …
Tip: Is an entire order generally assigned to one picker? It may be better to divide the warehouse into different picking zones, assigning pickers to a zone rather than an order to minimise the risk of their picking paths interfering with each other.
Delays due to waiting: poor replenishment planning may put people, systems and material on hold.
Tip: Is there any opportunity to reduce material handling? Each different stage holds a risk of delays.
Overproduction: delivering products before they are needed creates avoidable stocking needs.
Tip: Is production based on customer demand or on daily quota? How are peak moments and/or periods of low demand dealt with?
Tip: Check whether palletising goods which shortly will be unpalletised are being stored regardless and how to avoid this.
Any activity that causes repair, rework, returns or adjustments.
Tip: Are there any processes that leave room for misinterpretation? Would it be a good idea to provide visual guidance so as to prevent any time-consuming mistakes?
Less than optimal use of space.
Tip: If low volumes of small, slow-moving items are taking up several entire pallets, it is worth considering a different and denser storage solution.