Lean Warehousing Principles: What is a lean warehouse?
Lean principles have been around for quite some time. When we think of “lean” our minds immediately go to manufacturing. Probably because our roots are in manufacturing and quality assurance. So it’s something we’ve been working on for a long time.
Lean principles became the gold standard in manufacturing when Japanese manufacturing companies such as Toyota implemented them with great success. Now, these processes have spread to many areas of the supply chain including warehousing. But what does “lean” mean, and what is lean warehousing?
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A Brief Overview of Lean Practices
Boiled down, “lean” simply means to reduce unnecessary components in a process. Therefore, applying lean practices to the supply chain removes activities that do not add any sort of value. The goal of this process is to increase efficiency by eliminating waste while maintaining output.
Lean practices enabled Toyota to gain efficiency in manufacturing, and offer a variety of product variations such as color options. They accomplished this by creating the 5S system. Specific adjustments included right sizing machines for actual demand needs, and reverse connecting data for each step. In other words, each machine generated demand based on needs for each gate. Rather than produce maximum capacity, demand data communicates back to previous machines in the manufacturing chain.
Today, the Toyota manufacturing empire remains at the top in terms of total number of sales globally. Clearly, lean practices are a vital part of the manufacturing and supply chain. For more information on the story of how all of this came about, check out this book.
What is lean warehousing?
Lean warehousing is a warehouse that has implemented a specific set of practices to help eliminate unnecessary or non value add processes. The traditional “storage only” warehouse is becoming a thing of the past. Because warehouse operations now involve many different processes, lean principles are a vital part of ensuring efficiency for any type of warehouse.
Some modern warehouse services include inbound and outbound freight, receiving, pick & pack, kitting, inventory management, and even light assembly. The more processes in the system, the more necessary lean becomes. How is this accomplished?
The Moment Lean Made Sense for Us
When we first got started, our warehouse operations were focused towards finding ways to scale, add more customers, and do more with less space to keep overhead costs down. So initially you would think that considering lean principles shouldn't have been a priority for us at that time. But at AMS we find that lean is even more important when this is the stage of business that you are in because the efficiency can help you get security to achieve a point of scale. Don't ignore the small things even if you're business is still small. They add up!
Lean Warehouse Practices
Lean is always comprised of a 5 step process. Lean warehousing is no different however, the word “step” may not be the best descriptor. This is because continuous implementation and refinement happens at the same time rather than in succession. Regardless, these “steps” are as follows:
The 5S Methodology of Lean Warehousing
- Sort (Seiri)
Implementing sorting simply means dividing things inside the warehouse operations workflow into needed and un-needed segments. When you think of a warehouse, isn’t it simply a way to store, sort and organize materials? Therefore, “sort” is a critical function of lean warehouse management. To do this properly, filter every operation through this sorting function so you can identify useful and un-useful components. - Streamline (Seiton)
The streamline aspect of lean warehousing is doing away with the unnecessary processes in your operations workflow. This involves arranging physical materials for maximum accessibility as well as optimizing the layout of the floor plan so you can reduce wasted time and energy. - Shine (Seiso)
Shine is ensuring that the warehouse remains clean and clutter free. This includes repair needs or anything that can impact the productivity. Enacting this methodology can reduce the time required to perform specific operations by investing a little time to first solve the issue. - Standardize (Seiketsu)
The opposite of standardize is not implementing processes at all. To standardize involves creating specific step-by-step methods for each team member to follow at all times. These processes should be specific in their details and broad in their scope. Lean warehousing processes should even include a plan B operation. This ensures smooth operations even when problems occur. - Sustain (Shitsuke)
In the last of the 5S lean warehouse aspects, sustain stands for “continuous improvement”. This is why I do not prefer to describe lean principles as “steps”. Rather, this principle emphasizes that lean is not one and done. Implementation is a refining process over time.
Lean Warehouse Management
Just like any other process lean warehouse management takes effort and buy-in to be successful. To gain success in lean warehousing implementation, everyone must be on board. Well defined principles, buy-in, and understanding by all employees is critical. Full implementation takes place at every level in the organization (not just warehouse management) including labor and upper management. Each person can examine the 5S principles and continuously look for ways to streamline and remove unnecessary activities.
Before any implementation, teams should focus on gathering information. Encourage team members to look for processes that can be more efficient, and work together to plan solutions. Once you have a list of ideas, put a plan in place and document processes for each area. Finally, managers should ensure that team members continued awareness of inefficient or useless processes.
Lean Warehouse Examples
There are lots of ways in which lean warehousing implementation can benefit the way a warehouse operates. Below are just a few examples.
- Instead of sweeping dust and debris every day, look for and fix it at the source. It could be that a small hole open to the outside is causing it, which can be easily rectified.
- Place frequently used inventory items close to their destination. In pick pack and ship activities, a warehouse worker may pull a carton from a specific location and/or pallet in the warehouse 15 times per day. That means the time it takes to travel to the carton location, then return to the shipping area is multiplied by 15 each day. Therefore, reducing this travel time helps workers pick faster.
- Place heavier or large items closer to loading docks. The greater distance required for large or heavy items increases safety concerns and the less efficient moving those materials become.
- Implement a maintenance checklist for forklifts or other equipment. Doing so reduces the likelihood of costlier repairs or worse, equipment downtime.
- Consolidate inventory. If you have multiple locations for the same or similar inventory, this can add confusion and processing time. If employees need to search for, or travel long distances to retrieve items, that is an area for lean warehousing improvement.
Final Thoughts About Lean Warehousing
Lean warehousing has a lot of benefits when it comes to reducing cost, and increasing the quality of work done in your warehouse. However, there are some best practices for implementing and maintaining lean warehousing that should be followed.
If you follow the 5 steps of lean warehousing and get participation from all individuals involved (not just your warehouse management) you can have a successful and repeatable way to gain continuous improvement.
There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.