Lean Principles in Warehousing: What is a lean warehouse?

What is a lean warehouse? How lean principles are applied to warehousing with specific examples and methods.

Lean principles have been around for quite some time. They became the gold standard in manufacturing when Japanese manufacturing companies such as Toyota implemented them with great success. Now, lean principles have spread to many areas of the supply chain including warehousing. But what does lean mean, and what is a lean warehouse?

A Brief Overview of Lean Principles

Boiled down, “lean” simply means to reduce unnecessary components in a process. Therefore, applying lean principles to the supply chain removes activities that do not ad any sort of value. The goal of lean is to increase efficiency by eliminating waste while maintaining output.

Lean principles 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 lean principles. 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 principles are a vital party of the manufacturing and supply chain. For more information on the story of how lean came about, check out this book.

A forklift operator moving large pallets of packing materials stacking floor to ceiling in the corner of a warehouse

What is a lean warehouse?

A lean warehouse is one that has implemented lean principles in order to 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 an efficient 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?

Lean Practices in Warehouse

Lean is broken down into a 5 step process, if you will. However the word steps may not be the best descriptor for lean principles. This is because continuous implementation and refinement happens at the same time rather than in succession. Regardless, these “steps” are as follows:

A chart showing the 5S principles of lean warehousing

The 5S Methodology of Lean

  1. 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 the lean principles in a warehouse. To do this properly, filter every operation through this sorting function so you can identify useful and un-useful components.
  2. Streamline (Seiton)
    The streamline aspect of lean 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.
  3. 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.
  4. 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. Warehouse processes should even include a plan B operation. This ensures smooth operations even when problems occur.
  5. Sustain (Shitsuke)
    In the last of the 5S lean principles, 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

To gain success in lean implementation in the warehouse, 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 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 implementation can benefit the operations of a warehouse. 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 dramatically improves efficiency.
  • 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 improvement.

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