Lean

Warehouse – Kaizen/Continuous Improvement

Warehouse Management is a system that supports the daily operations in a warehouse.
Today's warehouses have to not only manage the flow of material within the facility, also the
flow of information throughout the supply chain.

The global market is increasingly pressuring businesses to improve the efficiency of their
operations. Today's warehouse management system is no exception. Using lean principles,
warehouses can see a remarkable improvement in organization and product flow as well as
their ability to meet the demands of customers.

As we study the warehousing operations, we should be able to identify every activity that
absorbs resources without creating additional value. The question that we all should ask to
ourselves is how much more profitable could the warehouse be if we eliminated the errors or
waste from the processes?

An effective warehouse management system helps businesses by:
• Supporting demand for custom orders (pick-and-choose orders)
• Resupplying stock based on customer demand
• Tracking inventory from the time it arrives at the warehouse to the time it reaches its
final destination
• Maintaining the facility to protect goods

Challenges encountered by warehouse management may include the following:
• Poor layout: Some storage areas may be overfilled while others are underused, which
makes it difficult to find supplies. There can be too much space between workstations,
increasing the time it takes to move an order from station to station. And workers may
have to excessively reach, bend, or stretch to complete their tasks.
• Ineffective storage and transfer of supplies: Fast-moving items might be stored in a
tough-to-reach space, increasing the time and labor it takes to resupply picking lanes.
• Ineffective processes: Frequent defects due to poor inventory management, missing
or damaged materials, and mislabeled supplies.
• Recurring slow periods in the supply chain: Workers must wait for materials to be
resupplied before shipments can be processed. Approvals for shipments and new
materials can take too long to process and orders backup.

Although staging of product at the shipping and receiving docks is accepted as a necessity
today, could it be eliminated? Since warehousing is nothing more than the management of
space and time, reducing waste starts with identifying the poor use of both.

Poor utilization of space is a kind of waste, and is money paid for every month. If extra space
is acquired when the existing warehouses are not utilized effectively, the waste is obvious.

Warehouses will receive many benefits by implementing lean manufacturing in their
management system. Warehouses will be able to meet the changing requirements of their
customers by improving their efficiency, reducing errors, maximizing the space available for
supplies, and by pulling supplies based on customer demand. Other benefits include:
• Reducing labor costs related to rework and inefficient handling of materials
• Reducing order processing time by standardizing workflow and limiting work-in-
progress
• Reducing unnecessary transportation of supplies by storing materials based on how
quickly they move
• Reducing slow periods by pulling supplies based on customer needs

Lean Warehouse – Short Report Page 1 Prepared by: Tarique Aziz


While warehouses face many difficult challenges, lean manufacturing tools can be used to
overcome many of them. In particular, value stream mapping (VSM), 5S, and Kanban can be
used to make warehouses more efficient.

Value stream mapping (VSM) is a process that enables warehouse managers to understand
how things are currently working. Workflow is visually mapped out and relationships among
processes are clearly identified, enabling warehouse managers to:
• Understand how various processes interact
• See how scheduling and departmental workflow affect operations
• Identify potential gaps in their processes

By creating a visual map, warehouse managers can identify materials that are being stored
ineffectively or handled too often. They can also improve the warehouse layout and storage
system to reduce handling and improve how items are stored. For example, fast-moving items
should be easy to reach, while slow-moving items can be placed towards the back of the
warehouse or at the top of the storage rack.

5S is a lean manufacturing tool that can improve warehouse efficiency by systematically
organizing and cleaning the workspace, as well as standardizing work practices and
procedures. The system includes five guidelines that can increase warehouse efficiency:
1. Sort (Seiri): involves removing unneeded items from the workplace. Warehouses can
maximize usable space by removing unnecessary tools, supplies, and equipment,
increasing the available work area and storage space for necessary operations.
2. Arrange/Set in Order (Seiton): requires each unique work area to be arranged for
convenience and efficiency. Work areas, tools, and supplies should be organized in a
manner that will improve worker productivity; make it easier to move from one
station to the next; and reduce movements like reaching, bending, and stretching.
3. Clean/Shine (Seiso): requires employees to clean their work area after every shift.
This step is designed to help workers spot potential issues by removing clutter, debris.
A clean warehouse will make it easier to find excessive wear caused by faulty
equipment; example: faulty packing systems can damage goods and increase rework.
4. Standardize (Seiketsu): consists of documenting successful improvements, so they
can be more easily applied in other work areas. Warehouses can optimize the
efficiency of each workstation by applying consistent improvements throughout.
5. Maintain (Shitsuke): requires each step in 5S to be repeated on a daily basis. This will
ensure that WMS can improve work practices on a daily basis.

Visual communication is a key element for any lean warehouse management system. Labels
and signs can be used to help organize the warehouse’s storage system and provide essential
information, while floor marking can be used to designate where tools, equipment, and
supplies should be placed. This creates a visual map that helps workers quickly find and store
supplies and tools.

Kanban is a "pull system." It pulls supplies to the warehouse floor based on what customers
have ordered, as well as the work that has been completed. Kanban uses visual cards to
control the workflow within a supply chain.
Kanban’s pull system also helps reduce errors in processing because it limits work-in-
progress. New work cannot start until the current job is completed and moved to the next
workstation.
If a worker at the packing station notices that the items do not match the order, the
packing station does not receive additional orders until the problem is fixed. This helps
workers identify issues and prevent errors from being repeated.

Lean Warehouse – Short Report Page 2 Prepared by: Tarique Aziz