Lean Warehousing in 3 words- Frequency, Distance, and Effort

Anyone trying to implement Lean in a warehousing/ distribution environment should have realized that the challenges in distribution activities are different from a traditional manufacturing environment. Using core principles of lean, we will realize that we need to focus on certain key aspects more than others. For example, we all know the eight wastes. If we observe a typical distribution center, one waste seems to predominantly dominate every other waste: transportation. More than 80% of waste in any distribution center comes from transportation of goods in the form of receiving or unloading trucks, putting away the product, picking, loading the trailers or just regular inventory moves.

Let us deep dive into transportation waste. Pick any part in the warehouse and we can actually break down its transportation waste into three key factors: frequency of usage, distance from point of use (POU) and effort of transportation. Higher the frequency of usage of the part, more the waste. Farthest the distance of the part from point of use, more the waste. The more difficult it is to retrieve the part, whether it is due to size, location or mode of transportation, the more time it takes to retrieve the part and hence more waste.

Take your highest volume part, create a supermarket location closest to the packing station and figure out a way to pick and deliver this product as effortlessly (least labor time needed) as possible and see how fast your operation improves. In one of our distribution centers, we recently did a kaizen event. As a part of the kaizen, one improvement, we had to do the same with one of our products that made up 10% of our volume. As soon as we did this, our efficiency for distributing that part improved by 50% and our pick to ship time reduced by more than 75%. In order to do this, however, we need good WMS systems that support both a traditional picking process as well as a supermarket/ kanban process.