Applying Lean Principles in Warehouse Operations

The Lean Principle Lean principle advocates completely waste-free operations Focuses on value as perceived by the customer. Most commonly applied in manufacturing Interesting to apply the lean principle for warehouse operations and gain competitive edge

Warehouse Importance & Challenges Importance of a Warehouse A vital cog within logistics, warehouse holds high potential for improving lead times, reducing logistics costs and creating competitive advantage. Challenges for a Warehouse Manager To increase productivity and accuracy. Adapt to ever changing market dynamics such as evolution of new channels, reduced lead times, high SKUs etc. Maintaining lower inventory levels. Optimizing the resources viz., storage space, labour, material handling equipment etc. Meeting customer demands and fluctuations. To improve customer satisfaction while reducing operational costs.

Pre-requisites for a Lean Warehouse To create a lean warehouse, the following are the prerequisites Foresight Preparation Documentation Analysis Appropriate Strategy Continuous improvements Most importantly, build self-awareness and understanding of each person’s role in warehousing operations and the importance of uninterrupted value flow in the system.

FOCUS AREAS TO TRANSFORM INTO A LEAN WAREHOUSE

1. Material Storage and Handling The material storage and handling can make or break the warehouse operations Inefficient methods should be replaced by throughput-oriented efficient facilities Optimized storage results into following benefits Smoother flow of inventory & operations Optimized inventory Optimized resources such as labour, material handling equipment etc. More space for holding & handling inventory Meeting customer commitments and higher customer satisfaction

2. Internal transportation Unnecessary movement of items inside warehouse add to Operational cost Labor costs Material handling equipment cost Warehouse rental cost Lighting and electricity cost Higher lead time and lower throughput rates. With an efficient warehouse storage layout, one can have fast-moving products in the front, slow ones at the back. With this, time taken for locating, picking and packing items will also be drastically diminished.

3. Inventory Management Successful inventory management ensures availability right product in right amount and keeps track of existing inventory and its movement. Inventory should not only be available in adequate amounts but also be easily visible and accessible. The most efficient inventory management strategy is the just-in-time method. Key benefits of Inventory Management Improved product life Reduced Inventory carrying costs Improved agility to respond to varying demand Increased picking speed

4. People Movement Factors influencing people movement and their efficiency in a warehouse are Operational layout of warehouse Effectiveness of work stations Processes involved in picking and packing Movement of material handling equipment. If a particular movement of people is wasteful, it will lead to loss of productive time and resources. In case of manual picking and processing, multiple handling will lead to inefficiency and a risk of items getting broken or damaged.

5. Delays Any delay in order processing has a negative impact on entire warehousing operations. Delays in people, systems and material, and waiting for replenishment, etc. should be avoided to achieve high productivity. Warehouses incur the cost of wages and all the fixed costs of warehouse and equipment rents, lighting and heating etc. Hence, it’s important to avoid any delay.

6. Over-production/Over-processing Leads to excess inventory Incurs costs on resources such as storage space, preservation and their management. Causes tied financials Affects competitiveness of the company

7. Defects Any action that results in repeats and corrections, such as inventory inconsistencies, billing errors, damaged materials, etc. add to wastage that can and should be avoided Stop and fix as soon as something goes wrong – defects are easily identifiable very close to the point of origin. By addressing the root cause of the defect immediately and not accepting nor passing on defects, subsequent problems can be avoided and overall product or service quality improved.

Conclusion Designing and implementing lean warehouse operations not only brings control, visibility and delivery stability but also reduces lead time, releases financial stress by enabling a high inventory turnover and ultimately reduces the cost to the total logistics output. Contact SILVER LINING for an expert advice on your warehouse storage and to transform it into a lean warehouse . T: +91 40 2313 9000 E: sales@silverliningstorage.in

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