Managing a warehouse efficiently is the key to a successful business. It helps in timely meeting customer demand while reducing investments. With the growth in a company, inventory/warehouse management becomes more challenging. Businesses follow many established practices for the same. Lean warehousing is one such practice. It aims at efficient warehouse management, which benefits the company.
Let us understand the concept of lean warehousing in detail. We shall also understand the principles underlying this concept.
What is Lean Warehousing?
Lean warehousing means managing a warehouse optimally. It aims at eliminating inefficient processes. This helps in maximizing returns and reducing costs.
In today’s world, a warehouse is much more than just storing the inventory. It also includes other processes like packing, dispatch, sorting, etc. Lean warehousing focuses on improving these processes and eliminating non-useful processes. These processes use resources but do not add value to the business. Lean warehousing aims at highlighting the problem areas and solving them.
The concept of Lean management has emerged from Japan.
Lean warehousing aims at increasing productivity. This is done by eliminating wastage (Muda), overburden (Muri), and irregularity (Mura). These three Japanese words form the basis of lean warehousing.
How does Lean Warehousing help?
A business faces many challenges in today’s world. These include timely meeting customer demand, maintaining adequate inventory, keeping costs under control, retaining workforce, etc. Lean warehousing helps address these challenges. It helps reduce costs, manage large inventories, speed up deliveries, manage demand fluctuations, etc.
Below are some of the benefits lean warehousing offers:
- It reduces order processing time through the use of standard operating procedures
- It reduces costs by eliminating inefficient handling of inventory
- It helps in timely deliveries, including urgent ones
- It helps in managing a large inventory through sorting and organizing functions
- It helps in managing seasonal demand through an optimum inventory management
- It helps in efficient use of warehouse space through proper storage of inventory
- It aims at optimization and hence promotes continuous improvement
How to apply lean warehousing in a business?
A business can apply this concept using the 5 Ss. These are as depicted below:
Sort (Seiri): Seiri means sorting. This is the first step in lean warehousing. Sorting means removing unwanted inventory items and processes.
One can sort the most, and the least sold inventory. One can also sort the most and the least productive processes. This way, one becomes aware of the bottlenecks in the warehouse operations. These can be removed to improve the functionality of the warehouse. Sorting inventory as per usage also helps in efficient deliveries.
Organize (Seiton): Seiton, or organizing, aims at increasing efficiency. It includes organizing the warehouse functions efficiently. One can place the most used inventory at accessible places. One can also tag the products and the storage containers. Further, one can map the warehouse along with all the products. Signages can be put in the warehouse to guide the employees. This will help save time and effort and provide them directions. One may also put trolleys and carts at many places. This will help in faster movement of goods.
Shine (Seiso): Seiso means shiny clean. It aims at maintaining the cleanliness of the warehouse. A clean warehouse attracts its customers and also encourages employees to work more efficiently. It also reduces the chances of accidents and highlights any damaged goods. One can define a standard cleaning procedure for the same. Dustbins can be allocated at appropriate places. Cleanliness kits can also be made readily available.
Standardize (Seikestu): Seikestu means to standardize. Standardization promotes uniformity. It also reduces stress and quickens warehouse functioning. One can document the best practices and procedures once made. One needs to explain these clearly to the employees. One can also display these best practices clearly, for ease. Posters and charts prove helpful in this. Also, videos and training booklets help in following the standardized procedures. This will help in avoiding confusion amongst the employees.
Sustain (Shitsuke): Shitsuke means to sustain. This is the final step in lean warehousing. This indicates maintaining the standardized processes and making continuous improvements. One should continuously review the procedures for their implementation. Regular audits are helpful in this. One should also incentivize the employees to make further improvements in the processes. Any innovative idea should be rewarded. This will help in sustaining the best practices implemented in a business.
Lean warehousing focuses on optimization. It aims at maximizing output with minimal use of resources resulting in efficient warehouse management. It reduces order process time, saves costs, and helps in faster deliveries. It also helps in the optimal utilization of the warehouse space. It provides direction to the employees and keeps them motivated. All this improves the financial health of the business.
To implement this concept, one needs to follow the five principles. The first is to sort the inventory and processes based on their importance. Next is to organize the warehouse functions. The third is to maintain the cleanliness of the warehouse. Fourth is to standardize the best procedures, and fifth is to focus on continuous improvement.
Concepts such as Kanban prove useful for lean warehouse management.