Applying Lean Principles

in Warehouse Operations

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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

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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.
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Pre-requisites for a Lean Warehouse

To create a lean warehouse, the following are the prerequisites
a) Foresight
b) Preparation
c) Documentation
d) Analysis
e) Appropriate Strategy
f) Continuous improvements
Most importantly, build self-awareness and understanding of
each persons role in warehousing operations and the
importance of uninterrupted value flow in the system.

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FOCUS AREAS TO TRANSFORM INTO

A LEAN WAREHOUSE

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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

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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.

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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

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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.

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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, its important to avoid any delay.

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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

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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.

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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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