Today’s modern approach to warehousing or as I want to call it warehouse production put high demands not only on continuous improvement but also continuous cost reduction. One of the greatest tools in my opinion to meet those demands is lean.
Lean is a great tool, you can use it in almost every business from hospitals, administrations, productions or in warehouses for example. Lean have a perfect approach to improvements and cost reduction because you try as long as possible to work with your existing resources, you don’t start with a ROI calculation quite the opposite actually. You look on waste and time thieves. You questioning every process you do in the warehouse.
Warehouse is a very good place to start with lean because you often get quick results. The reason is because lean is all about reduce operations, processes and material things that not add value to the products, as you can imagine there is a lot of those in a warehouse. The whole warehouse is actually a big margin cutter.
There is many areas to look into, for example:
· Transportations costs, in warehouse we move products all the time. We make goods receiving and put away. We pick and pack. Sometimes we move the product to a location that is more suitable. We sometimes do a refill from buffer. As you can imagine there is a lot of transportation time.
· Waiting, if you have not made a good flow analysis it can be a lot of waiting. Waiting in the packing area, waiting at picking locations (high frequent locations) and waiting on buffer refills and so on.
· Any kind of defects like picking errors that results in returns or transportation damages because of bad packaging.
· Bad equipment like forklifts that does not work or maybe not suitable for the purpose.
The list can be long with subjects that you optimize with lean in warehouse. Your creativity set the limits.
Standardization is an important part of lean that includes both quality and productivity. If you have a “best practice” solution, it is important to make that a production standard to get proper results. It demands a strong leadership with great communicative skills to get people understand why they should follow the standard procedures.
I can not emphasize enough how important leadership is for lean to work! Your management must also have strong communication skills. Lean requires a humble approach from the management and you must give the employees ideas serious consideration in order to get the employees to feel like a highly valued company asset. As I have written before in previous articles, you need to have a trial and error mindset in the warehouse to evolve. The employees should not be afraid of punishments for a mistake. It inhibits their initiative and the development of business.
The management need to communicate the reason to continuous improvement and cost reduction. Without a purpose, the employees get lost and loose energy to be creative. You need to explain the importance to evolve in order to be competitive.
Measure what is important. In my opinion, many companies measure too much. They have too many KPI with questionable value to the economic impact. Make it easy for the employees to understand and use KPI that is easy to follow up in warehouse production.
Don’t be afraid to try new things immediately. Act as a true leader and show that you are serious about the lean implementation, put on your work clothes, and participate in the change process. If you have a new packing area layout for example participate in the work with moving everything around. Don’t analyze everything too much, as I wrote before if it does not cost more than some man-hours to do the change. Use “trial and error” and experiment. It is important to get some quick changes so that staff feel that this is for real.
If you want inspiration about lean I recommend you to read: ”Lean Thinking: Banish Waste and Create Wealth in Your Corporation” James P. Womack and Daniel T. Jones. This is one of the first major books that described lean and the positive impact. The first edition came out 1996, but is available in revised and updated edition.
If you try lean for yourself in a small scale and you feel like this could be something big, I do recommend investing in training/education for both yourself and your staff. In this way, you keep your staff motivated and give them inspiration. It does not have to cost a fortune. Remember that you and your staff is the expertise in your warehouse production but a education in lean give you a new angle when you look at the warehouse production. Both the leaders and staff need to have the same “lean mindset”. There are many great companies that train organizations in lean.
Remember, your warehouse is the heart of supply chain. You as a manager need to be brave and lead the staff and encourage innovation. Lean is the perfect tool for that kind of work, but you must have the right leadership in place first.
If you need inspiration about lean leadership in warehouse read my article:
Below you find an article I wrote about how to use “trial and error” in warehouse to develop your operations: