There are several compelling reasons why it pays to implement lean thinking in a warehouse. It’s a powerful management tool offering a host of solid business benefits that can transform an organisation. Indeed, applied properly, it can help turbocharge productivity, speed and quality, and massively reduce waste, disruption and costs.
At the heart of lean thinking is creating more value for customers with fewer resources by eliminating waste. Waste in this context means several things including excessive processing, misplaced stock, motion that adds no value, and transportation.
There is a popular misconception that lean thinking works only for manufacturing. In fact, it applies in every business and to every process. It’s not just about cost-cutting; rather, it’s a way of behaving for the whole organisation. Indeed, lean principles can, and should, be built into all facets of a business, including warehouse operations.
But how can you apply lean thinking? The answer lies in five lean principles:
- Specify value – Only a small proportion of the total time and effort in any organisation adds value for the customer. By clearly defining value, all the non-value adding activities (also known as waste) can be targeted for removal. In a warehouse context , on the basis that you can’t manage what you don’t measure, it pays to track people, assets and inventory to enable you to improve efficiency, profitability and safety while also reducing waste
- Map the value stream – The value stream comprises the activities needed to deliver the product or service. Once you understand what your customer wants, the next step is to identify how you are delivering it (or not) to them. Here, automatic location systems using technologies such as RFID can enhance productivity, improve safety and reduce errors, thus boosting your value-adding activity.
- Establish flow by eliminating waste – Try to dispense with everything that adds no value (delays, detours, faults and unnecessary activities) so that your product or service ‘flows’ to the customer without interruption or waiting. Now might be the right time to review your warehouse management systems and decide whether new ones could improve flow.
- Respond to customer pull – Gain an understanding of customer demand on your service and then create a process to respond so that you supply only what customers want when they want it. In a warehouse, this might, for example, involve tightening up your stock, pallet and inventory management through effective tracking.
- Aim for perfection (even though you won’t attain it) – Radically reorganising individual process steps helps, but the gains become truly significant as all the steps link together. As this happens more waste becomes visible and you move towards the theoretical goal of perfection.
Lean thinking makes perfect business sense. Why? Respected management thinker Peter Drucker put it best when he said: “There is nothing so useless as doing efficiently that which should not be done at all.”
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