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Follow These 13 Lean Principles to Eliminate Waste in the Warehouse

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Featured Best Practice on Lean Management/Enterprise

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Push-Back-RackIn managing and improving the operations of your warehouse, consider Lean initiatives to eliminate all waste and bring value to your customers beyond their expectations.  Here are 13 principles to follow.

1. Communicate effectively and often.

Clearly communicating to workers your organizational goals, key performance indicators (KPIs), and the processes to achieve them is one key to effective warehousing operations. When managers fail to create an environment of open and clear communication, employee productivity suffers, resulting in high turnover and wasted resources.

2. Standardize your processes.

Standardize processes by reducing potential variation in areas such as unloading, accounts payable, shift scheduling, and facilities management. Standardization saves time and money, and reduces errors.  Remember: There is always a better way to do anything.

3. Measure what matters for continuous improvement in your processes.

If an outcome is not important to customers and shareholders, don’t waste time measuring it. One 3PL-managed distribution center for a major U.S. manufacturer adopted a work measurement program to gauge and report warehouse performance at the employee level. The facility increased productivity by 10% and reduced labor costs by 11.3%.

4. Determine what drives processes to ensure the proper causal connection between outcomes and enablers.

Key performance indicators reflect the past; standardization and error proofing are the answer to productivity now.

5. Use the five step approach to understand the “why” of your operations, not just the “how.”

This approach: Define, Measure, Analyze, Improve, and Control reduces costly process variations. The backbone of Lean Six Sigma methodology, DMAIC ensures sustained, defect-free performance and highly competitive costs.

6. Involve, align, and empower your associates.

Listen to the Voice of the Employee (VoE): The people who do the work every day are process experts who know how to reduce or eliminate waste. Aligning your managers and staff to a company culture committed to inquiry, responsibility, partnership, and customer satisfaction can significantly impact warehouse productivity.

7. Educate your leadership.

Educate leadership to ask the right questions, gather necessary information, make decisions, and take appropriate, corrective action. This is vital to improving processes, products, and services. Leadership should visit the shop floor often, and work together with their people to improve processes and solve problems.

8. Create a strong training program that incorporates cross-training.

Break a job down and present the operation to new associates. Allow them to test their performance before releasing them to the process.  Try having your employees “shadow” tenured employees to gain valuable hands-on experience.

9. Incorporate the use of work output analysis to achieve a steady fulfillment flow with standardized work instructions.

By specifying the maximum cycle time allowed to produce a product in order to meet demand.

10. Look at variation to increase productivity.

This is the heart of Lean Six Sigma: reducing variation to make a process more stable and predictable. Find a significant measure that reflects your process, then reduce the variability of that process as much as possible.

11. Have occasional team meetings to review these goals and objectives.

Let your employees speak freely. Successful organizations take team building seriously. Take your organization to a new level and improve productivity.

12 There is nothing wrong with setting up internal competitive warehouse teams.

Award the team that has the best idea: improved process or problem solving. Meet monthly or quarterly to review these ideas, and award the winning team.

13. Finding the right level of automation and systems.  

ROI analysis could put automation into your planning for cost improvement. The wrong material handling equipment can be creating hidden lost time and inefficient product flow, impacting cost and customer service

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Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.

As we continue to deal with COVID-19 and its economic aftermath, most organizations will prioritize Business Process Improvement initiatives. This is true for a few reasons. First, Process Improvement is one of the most common and effective ways of reducing costs. As the global economy slows down, Cost Management will jump to the forefront of most corporate agendas.

Secondly, a downturn typically unveils ineffective and broken business processes. Organizations that once seemed agile and focused during periods of growth may become sluggish and inefficient when demand drops off.

Lastly, COVID-19 has expedited Digital Transformation for most organizations. One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). Thus, we have included numerous RPA frameworks within this Stream.

Learn about our Process Improvement Best Practice Frameworks here.

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About Charles Intrieri

Charles Intrieri is subject matter expert on Cost Reduction, Supply Chain, and 3rd Party Logistics. He is also an author on Flevy (view his documents materials). Managing his own consultancy for the past 25 years, Charles has helped dozens of clients achieve leaner and more efficient operations. You can connect with him here on LinkedIn or email him directly ([email protected]). Charles also has a presentation Why Lean Fails in a Company? available for free download here.

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