Unlocking Efficiency: Embracing Lean Warehousing for Optimal Operations

Efficiency is the key to success in the fast-paced logistics and supply chain management world. As businesses thrive, they look at streamlining their operations and delivering exceptional customer experiences, and the concept of Lean warehousing emerges as a powerful solution. Lean warehousing offers a transformative approach that maximizes productivity, minimizes waste, and drives continuous improvement within warehouse operations. As per the latest report of Mckinsey, applying lean warehousing management can save up to 20% to 50% of costs.

What is Lean Warehousing?

To understand lean warehousing, let’s focus on the term Lean, as it’s relatively a new concept in the warehousing industry. The Lean way of working was first conceptualized by Toyota for automotive manufacturing which means eliminating tasks that use resources but do not add value in return, that is, Lean is a systemic method that reduces wastage without compromising on productivity.

The state-of-the-art warehouses today are not restricted only to storage but also involve multiple day-to-day operations that include, receiving, put-away, picking & packing, docking, dispatch and shipping, hence the lean methodology is applied to warehousing. The reason is to eradicate the processes and tasks that are utilizing resources but adding no additional value. This is done by implementing the 5S lean system: Sort, Straighten, Shine, Standardize, and Sustain.

Applying Lean Concept in warehousing using the principles of the 5S system

First S – Seiri or Sort

The first step is sorting out the warehouse that is, separating things that you require from the ones that you don’t.

• Remove outdated and damaged inventory, broken pallets, defective warehouse equipment
• Replace manual pick with scanners or voice pick
• Consider going paperless using digital technology
• Mark items to be disposed of and stock them at a separate place until approval for final disposal is obtained.

Second S – Seiton – Straighten

Straightening is the next step after sorting. Organize work to enhance efficiency.

• Frequently used items to be kept in an accessible place
• Locating items by adding tags and labels to inventory to save time
• Include signs and instructions to the scheme of the organization to keep the warehouse staff guided and help reduce searching & fetching time
• Empty pallet packaging points at different locations or easy access
• Install reminders at equipment parking areas for staff to recharge the equipment as the day ends.

Third S – Seiso- Shine

Shine stands for cleaning and maintaining the warehouse after the work is done.

• At the end of each shift, the work areas are to be cleaned, this results in a first-hand report of any defects or damages. A schedule must be maintained for the same.
• Bins at every aisle end to collect waste packaging paper and broken pallets
• Maintain spill kits & use heavy-duty industrial cleaning tools and supplies to save costs in the long run and it also helps in case of accidental spillage or littering in the aisles.

Fourth S – Seiketsu – Standardize

Standardization brings uniformity. Creating standards for all work areas in the warehouse is essential.

• Make each staff aware of the process followed and ensure that all the warehouse operations and best practices are documented
• Photographic display of procedures across the warehouse for easy access
• Use posters and charts with more to see and less to read
• Training manuals and videos help staff follow standards for smooth operations

Fifth S – Shitsuke – Sustain

Sustainability or continuous improvement in processes and procedures is important in a warehouse. Standardization is ineffective without sustenance.

• Inspire the staff to accept new changes (standards or policy) as continuous improvement is nothing but striving for perfection. Continuous improvement will pave the way for Kaizen
• Regular audits and inspections to ensure that standards are followed
• Give credit for innovative and creative ideas from the staff
• Be open to new standards and processes, if the current standards are not working well.

Even though there are only 5S as per the principle, however, companies have introduced a sixth S, ‘Safety’ more recently which signifies an essential element of warehouse operations.

The Sixth S – Safety

The sixth principle is included to make warehouses safer for the working staff and also averts litigation by preventive accidents.

• Conduct risk assessment at periodic intervals
• Review of the warehouse layout and design (walkways, stairs, ramps, aisles) to check on safety and make necessary changes if needed
• Emergency exit and evacuation procedures, easy access to fire extinguishers,

With lean warehousing, you work on process simplification to achieve transformation and offer a competitive advantage. With that, you can also tap on technology using 20Cube’s digital portal MyHub, as automation and digitalization is all about simplifying and making processes work for you.