What is Lean Warehousing: Principles, Benefits & More

1. Sort (Seiri)
2. Set in Order (Seiton)
3. Shine (Seiso)
4. Standardize (Seiketsu)
5. Sustain (Shitsuke)

Kaizen 

What is Lean Warehousing?

Lean Warehousing using methodologies and principles of Lean which focuses on streamlining operations by reducing waste, optimizing process, and improving efficiency. The crux of Lean Warehousing is to offer a space that is optimally utilised by doing minimum wastage and improving operational efficiency to meet the demand. It emphasises on using the right warehouse for right storage leveraging the most efficient solution available.

The root of Lean philosophy is rooted in the Japanese automotive industry, especially Toyota’s production system in the mid-20th century. This philosophy was initially aimed to boost manufacturing efficiency. Over a period of time it gained popularity and was used in manufacturing sectors as well as different areas (warehousing, supply chain, administration, etc) to eliminate waste and improve operational efficiency.

Lean warehousing includes methodologies such as

• Just-in-time inventory management (JIT)
• Continuous improvement (Kaizen)
• 5S workplace organization
• Using KPIs to monitor and assess performances

Why Implement Lean in Warehouses?

There are numerous reasons as to why an organisation implements lean warehousing. Here are some of the most important reasons to practice lean warehouse management/ lean warehousing:

• Minimising the cost of operations.
• Meeting delivery targets set for same-day and next-day deliveries.
• Enhanced customer satisfaction by providing them on-time orders.
• Manage multiple-channel delivery of products.
• Better control during unpredicted economic times and rising costs.
• Better management of seasonal and fluctuating demands.

Core Principles Used in Lean Warehousing

Lean Warehousing is formed using essential principles of Lean, the two of most important are 5S principles and Kaizen. Both these principles trace their origin back to the Japanese manufacturing of the mid-20th century.

The 5S Methodology

1. Sort (Seiri)

The sort principle states that all unnecessary items must be thoroughly assessed to ensure if it’s valuable or not. It must be removed if it’s unnecessary, obsolete, or not in use (for example unused tools and equipment).

2. Set in Order (Seiton)

As the name suggests, ‘set in order’ principle suggests to organise the remaining items efficiently. In a warehouse, the process may involve shuffling and organising category wise for easy access and efficient picking.

3. Shine (Seiso)

The shine principle states that a tidy and well-maintained work environment (warehouse) is essential for efficiency and safety.

4. Standardize (Seiketsu)

The standardised principle states that it is crucial to set a uniform procedure and practice across the board. A warehouse with lean principles may develop standard operating procedures such as receiving of shipment, storage and dispatch.

5. Sustain (Shitsuke)

Sustaining or continuing is the most essential principle of Lean. This principle includes maintaining and reviewing standards. Audits and employee training at regular intervals ensure that warehouse employees follow the well-established practices and procedures. It is also crucial to reward employees regularly who maintain a high standard of warehouse operations.

Kaizen (Continuous Improvement)

The original concept of Kaizen used in automotive manufacturing sectors was to make small, incremental changes to improve efficiency and quality. In the world of warehousing, Kaizen would mean continuously evaluating routes to reduce travel time in picking up items. It can also mean establishing a feedback system in place for employees to suggest improvements. For example, a warehouse may continuously evaluate its order processing tim, identify bottlenecks and obstacles, and use lean principles to eliminate the,

How to Implement Lean Principles in Warehouse

Hiring a Lean consultant is the best way to implement lean principles in the warehouse. From conducting audits to training employees and implementing Kaizen, a lean consultant ensures a complete and successful implementation of lean principles.

1. Audit of the Warehouse Processes

The audit of the warehouse begins with defining goals and objectives one wants to achieve. A goal could be reducing costs, removing waste, ensuring safety compliance, or enhancing customer service. Next comes analysing processes and identifying bottlenecks. Afterwards, a consultant conducts benchmarking, provides recommendations, and presents it to relevant stakeholders.

2. Implement JIT (Just-in-Time)

Just-in-Time is a core lean methodology and in warehousing context, it requires you to stay in contact with the suppliers to ensure that raw goods arrive just as production is scheduled to begin.

3. Warehouse Employees Training & Education

Creating a Lean warehouse means offering specific training sessions focused on lean warehousing principles and practices. This includes education on lean warehousing principles and practices such as the 5S methodology, VSM, and waste reduction principles.

4. Automate Warehouse

In a world of constant technological advancements, automation in warehousing is the way forward. Automation can tremendously improve efficiency and productivity in a warehouse.

Using robots, automation storage etc, a warehouse can leverage speed with consistency.

5. Kaizen (Continuous Improvement)

Using data driven changes over a period of time, a lean and efficient system in warehouses stays put even in the shift in demand. By creating a culture of continuous improvement and conducting regular Kaizen events, one can bring sustainable changes.

A successful implementation of Lean principles in a warehouse offers the great benefits which includes: increased efficiency, reduced costs, improved quality, agility, and safety.

If you want to learn more about lean and its uses in warehousing, supply chain, or specific industry, contact: ribcon.com, an experienced Lean consulting company.