Lean Thinking in Warehouse Management 4

Lean Thinking in the Warehouse

• Lean is becoming increasingly important in supply chain and logistics, with warehouses being a good starting point for implementation.
• Warehouses are becoming a strategic tool for achieving a competitive advantage.
• Today's warehouses serve as distribution centers supporting JIT supply chains, which are low cost, flexible, and efficient.
• E-commerce growth affects warehouses and both inbound and outbound logistics.

Implementing Lean Principles in Distribution

• Identify customer expectations and determine the value you add to the process.
• Plot the Value Stream: Identify all steps involved in moving goods through the system.
• Make the Process Flow: Eliminate activities that hinder the free flow of materials throughout the facility.
• Pull from the Customer: Lean systems are pull systems, drawing materials and merchandise into the distribution network based on customer wants, not forecasts.
• Pursue Perfection: Continuously strive to optimize and improve processes.

"Assembling" Orders

• Warehouse operations may appear active with constant movement of people and equipment, but this doesn't necessarily mean they are productive.
• Orders can pile up and wait between processing steps, causing clutter and wasted space.
• Orders should be "assembled" efficiently, minimizing non-value activities and delays in warehouse operations like receiving, putting away, and picking.
• Consider assigning orders based on "batches" of line items instead of assigning entire orders to pickers.
• Implement zones for pickers and feed workstations regularly to ensure smooth product flow.
• Aisle and rack layouts should optimize space utilization, placing frequently used items closest to shipping to reduce travel distance.

Value Stream Mapping in the Warehouse

• Value stream maps provide a comprehensive view of all warehouse activities, allowing employees to suggest improvements in various areas.
• They display current and future state maps, enabling employees to witness previous enhancements and participate in ongoing improvement efforts.
• To assess operations using a value stream map, involve operators and supervisors, identify Lean improvements, question every activity, implement Lean enhancements based on the VSM plan, and then restart the cycle.

Lean Tools in the Warehouse

• A team approach and lean tools such as problem solving, error proofing, and standardized work are crucial for identifying wastes in areas like errors, inventory inaccuracy, damage, safety, and lost time.
• Pull systems using kanbans are a natural fit for warehouses, managing everything from packing materials and forms to product assembly.

Total Productive Maintenance (TPM)

• TPM is a potential tool for warehouse optimization because it addresses equipment-related waste.
• This tool focuses on maximizing the efficiency of equipment, including automated systems like carousels, forklifts, and hand trucks.

Lean Warehouse Examples

• Menlo Logistics, a major 3PL provider, has implemented Lean principles widely and uses them as a competitive advantage.
• Menlo emphasizes identifying waste in areas like material flow, transportation interface, and warehouse efficiency.

Waste Reduction Strategies

• Mapping Material Flows: Analyze and optimize material movement from vendors to customers, eliminating points of unnecessary stoppage.
• Keeping Drivers and Tractors Moving: Synchronize warehouse workflows with transportation to minimize driver downtime.
• Using Milk Runs: Transporting mixed loads from various suppliers to a single customer reduces transportation costs and creates consistency in the inbound supply network.
• Electronic Data Interchange (EDI) and RosettaNet: Menlo uses EDI and RosettaNet extensively for data exchange among supply chain partners.
• RosettaNet is a collaboration of major companies in various industries, working to standardize e-business processes.
• Warehouse Efficiency: Design layouts that streamline inbound and outbound flows, improve labor efficiency, and maximize space utilization.
• Optimize Transportation Routes: Plan optimized delivery routes to minimize travel time and costs.

Lean Thinking in the Warehouse

• Warehouses are used strategically for a competitive advantage
• Lean thinking is relatively new in the supply chain and logistics industry
• The warehouse is a distribution center that supports a JIT (Just-In-Time) supply chain
• Lean principles use a pull system to draw materials and merchandise into the distribution network based on customer wants
• The five steps to implement Lean principles in distribution are: Identify customer needs, plot the Value Stream, make the process flow, pull from the customer, pursue perfection
• The goal of Lean in the warehouse is to be low cost, flexible, and efficient

“Assembling” Orders

• Orders should be “assembled” in the most efficient manner, minimizing non-value activities
• Orders should be assigned based on batches to pick line items to minimize delays in warehouse operations
• Pickers should be assigned zones to ensure smooth workflow
• Aisle and rack layout should be optimized to ensure efficient space utilization

Value Stream Mapping in the Warehouse

• The value stream map provides employees with an overall view of warehouse activities
• The map displays the current and future state maps to allow employees to see previous improvements and participate in ongoing improvements
• Employees and supervisors should be involved in assessing operations using a value stream map

Lean Tools in the Warehouse

• Lean tools such as problem-solving and error proofing are used to identify and eliminate waste
• Pull systems using Kanbans are effective for managing packing materials, forms, and product assembly
• TPM (Total Productive Maintenance) focuses on equipment-related waste and should be implemented for warehouses with equipment such as carousels, forklifts, and hand trucks

Lean Warehouse Examples

• Menlo Logistics uses Lean principles as a competitive weapon by identifying waste in various areas, including material flows, driver and tractor movements, and transportation routes
• Menlo Logistics utilizes milk runs to transport mixed loads from different suppliers to one customer, which reduces transportation costs and creates consistency in the inbound supply network
• EDI (Electronic Data Interchange) and RosettaNet are tools used by Menlo Logistics to pass data among supply chain partners
• Menlo Logistics designs warehouse layouts that optimize inbound and outbound workflows, maximize labor efficiency, and deliver high space utilization
• Menlo Logistics uses LMS (Logistics Management System) to optimize transportation routes and carrier selection
• Menlo Logistics works with customers to implement returnable containers for repetitive shipments, which reduces packaging waste
• Packaging optimization involves studying packaging sizes to maximize pallet and trailer utilization and minimize transportation costs

Explore the principles of Lean Thinking as applied to warehouse management and distribution. This quiz covers how to implement lean principles to enhance efficiency and adapt to the demands of e-commerce and customer expectations. Discover strategies to create a value-added process in your warehouse.