Lean Warehouse Management Consulting

Requirements of New-Age Warehouses

With the emergence of eCommerce and innovative business models like dark stores, the role of warehouses has undergone a few major shifts. These evolving requirements are highlighted below.

Consistency in Product Availability

Today, customers have access to more options. If a product is not available, a competing product is almost always available to them in another store. Or they might consider online options. Businesses do not want to lose customers because of stocking reasons. And warehouse and inventory management play a critical role in ensuring that businesses are able to meet customer expectations in terms of product availability in the stores.

Aid the Business Model

Warehouses have become an important component of modern-day business models. In one or the other, warehouses have assumed heightened strategic significance.

Sometimes warehouses shrink the distance between production and consumers. Sometimes they help keep raw materials closer to the manufacturing plants. What has changed from the traditional perspective is the intensity of the business requirements from warehousing solutions. For instance, it is a common practice in many traditional warehouses to send goods to stores in huge lots using bigger vehicles. But that idea of saving money does not hold much ground today. It would delay in-store availability and home deliveries. Plus, smaller vehicles make more sense in today’s urban traffic conditions than the bigger ones. Not paying attention to these details could easily jeopardise a business model that thrives on speed.

Maximum utilisation of Space

Optimisation could be a loose term. The right word is maximisation. Making the maximum possible use of the space available and nothing short of that is the new standard in warehousing. It helps businesses process more inventories per cycle. They could make the most out of the relatively-fixed operational expenses like rentals and salaries. If the warehouse is a service provider, it could serve more clients without compromising on the quality of services.

Synchronisation of Processes and Automation

With speed and precision becoming the norms in every sphere of business, warehousing could not have remained secluded. The answer to providing speed and precision to warehousing is process orientation and best-fit automation solutions. But the mere presence of processes and automation do not perfectly serve the contemporary requirements of today’s warehouses; the need is to achieve synchronisation between the two aligned with the broader business goals and objectives.

Omnichannel Capabilities

With more businesses turning omnichannel by the day, warehouses cannot be made to stay with the yester-year capabilities. Empowering a warehouse to handle omnichannel operations requires adaptations in the space management, processes, warehouse software applications, manpower management, logistical planning and resources, budgeting, etc. For example, retail stores cannot use the store itself as a warehouse. It would create problems in managing the store for walk-in customers. It would be a good idea to create additional space for omnichannel operations.

Strategic Integration

Today, many business decisions cannot be made without factoring in the impact and adjustments in warehousing, especially the ones that have a bearing on the inventory. The simple reason for this is that now warehousing is more closely wired with business models and value chains. For instance, a simple sentence on a social media post that ‘now at your nearest store’ implies a commitment. By the time this post is published, the stock must have reached a majority of the stores. But what if the goods could not reach the stores because the concerned warehouse ran out of space? Would not it have been worthwhile to check that before pulling the ad?

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What is Lean Warehouse Management?

Lean Warehouse Management is a conscious effort of making warehouse operations more efficient and capable. When we say ‘conscious effort’, we are referring to the deliberate use of lean principles and practices. Otherwise and ideally, every business wants to have efficient warehouse operations. What takes them to lean warehousing is when they actually apply the lean principles and practices.

The term lean is always in the back of our heads. It literally means slim and slender. The concept of lean can be understood as losing weight under diet control. The body is trained to get the right nutrients while foods that contribute to weight are avoided. The routine activities should not get affected. The objective is to maintain a healthy and active body with no excess or unnecessary components.

The objective of lean warehousing is to get away with redundancies, bottlenecks, inconsistencies, and wastages and focus only on what is necessary. For example, semi-automating repetitive administrative purchases/requests reduces human intervention. Given below are a few more lean warehouse examples in action:

Use of automation in the detection of expired products lying in a warehouse
Use of appropriate inventory carriers for internal movements
Separate zone for defective/obsolete products that are to be returned/disposed of/recycled
Strict adherence to no-stocking-on-pathways saving movement time
Quick decision-making via pre-established criteria and conditions
Close tab on logistical movements and suppliers for timely arrival/dispatch of inventory
Inventory department to coordinate with warehouse for space availability
Prioritising work as per urgency and importance
Timely preparation of shifts and rosters with advance notification
Scheduled maintenance of assets
Use of signboards and instructions
Established methods for tagging and labelling inventory
Use of barcode scanners

Lean warehousing is not rocket science. It comprises simple practices most of which could be easily incorporated. But the outcome from these practices is enormous in the mid to long run. Take, for example, the practice of prioritising work as per urgency and importance. An inter-city order that is to be delivered after two days could be put off and priority can be given to an order that has to be delivered the same day in the same city. The outcome of this is enabling timely order fulfilment. But if wrong orders are pushed into the process, it could risk delivering the first order on time. And if this mistake is made on an enormous scale every day, many orders would not make their destinations on time eventually tarnishing the brand.

Another sound feature of an agile enterprise is quicker decision-making. That, either could be left to the individual holding the position or a set of pre-established conditions and criteria could be provided aimed at helping make the right decisions without wasting time or the need for avoidable intervention of a superior authority.

Implementing Lean Warehouse Management

The concept of lean originally stems from manufacturing. It was introduced by Japanese auto manufacturer Toyota. Because of its relevance and utility, the idea of lean was applied in other areas of management. Warehousing is one of them. There is a systematic way to go about implementing lean warehouse management. It is known as the 5S model. A graphical representation of the 5S lean warehouse model is shown below followed by a detailed analysis on how to achieve a lean warehouse and how to apply lean principles in warehousing.

SORT – Eliminating the Negatives

In sorting, the required and unrequired aspects of the warehouse and warehouse operations are identified. The assessment covers processes/workflows, tools and equipment, furniture and fixtures, communication, movement, etc. The objective is to identify and eliminate any unrequired aspect. This automatically shifts the focus to the must-haves. For example, there is no point in keeping empty containers in anticipation of future utility. Such resources consume space that could be used for other inventory. Sorting could also create new operational requirements. Extending the same example, the element of reporting empty containers becomes necessary in the SOPs of the concerned process owners. Otherwise, reaping the benefits of sorting will turn out to be a one-time event.

STRAIGHTEN – Building on the Positives

The principle of straightening involves streamlining the required aspects in order. Again, it covers processes/workflows, tools and equipment, furniture and fixtures, zone allocation, communication, movement, etc. The objective here is to have the right aspects in the right ways and places. Incorporation of signages and pathway markings for smooth movement of people, inventory, and mechanical tools within the warehouse would be an instance here. Or it could be a change in the shelving strategy for the reasons of easier and quicker accessibility of inventory. In the previous practice, we eliminated the negatives. In this one, we put emphasis on the positives.

SHINE - Cleanliness

As the name itself speaks, shining is about cleaning and keeping things spic and span. An important requirement to keep a place clean and organised is not to create clutter in the first place. Cleaning and re-organising efforts are significantly reduced when cluttering is not allowed in the routine. But that does not negate the need for cleaning. Some simple efforts in this direction are weekly cleaning of the inventory shelves, making it mandatory to clear up workspace after every shift, use of proper dustbins, keeping dustbins in the right places, taking garbage bins out daily, prioritising repair and clean-up of accidental spills and leakages, etc.

STANDARDISE - Process

The fourth lean principle is bringing uniformity and consistency in the practices and procedures. What is not repeated will be forgotten very soon. That is core to human behaviour. There is a wise saying that practising is not about ‘until getting it right’ but ‘until not getting it wrong’. And in this pursuit of achieving standardisation, the most adept tool is Standard Operating Procedure, also known as SOP. On the surface, SOPs are documented workflow procedures that serve as operational roadmaps for employees. It covers not only the flow of work but also the ‘who, why, where, when, and how’ of every step involved in an operational activity. When SOPs are implemented and religiously followed across an organisation, the same processes give the same output irrespective of who carries it out where or when. By implementing SOPs, warehouse management becomes highly process-oriented.

SUSTAIN - Nurture

Like many other Japanese concepts on management, lean is also a long-term goal. The practices have to be sustained. This involves perpetual assessments and audits, participation of employees, executive sponsorship, technological upgradation, new sets of skills and expertise, new strategies and tools, etc. Housekeeping and safety are also important parts of sustenance and maintenance. The ultimate objective here is to make the lean principles and practices a part of the work culture.

The beauty of lean is that it can be incorporated like nurturing a plant. There are no hard and fast rules but an underlying essence for long-term and sustainable improvement. But there is no denying that achieving a lean manufacturing warehouse can be a complex and gigantic exercise for big sectors like automobile and FMCG.

How BPX can Help

BPX is a management consulting brand specialising in business process management. We develop process solutions for business and non-business organisations. Industries we cater to cover retail, eCommerce, automobile, engineering, financial institutions, and more. Expert and experienced professionals are deployed in the design and delivery of our services. From planning to implementation, our services and solutions are carried out with due adherence to prior planning and established processes. With a growing international presence, BPX is now a global brand with a service presence in the Middle East and South Africa.

BPX can help your business adopt the lean warehouse model. We understand the functioning and requirements of today’s warehouses. Our experts carry out extensive assessments to understand the unique business and warehousing requirements of each client to shape and design the lean solutions that best-serves their business goals and objectives. Three important areas in the application of lean warehousing principles and practices where our expertise makes a difference are highlighted next.

Layout Planning: The layout of your warehouse is the first important subject in implementing lean. It defines the quotients for space optimisation, movement, accessibility, safety and security protocols, cleanliness and hygiene, etc. Layout planning is one of our original proficiencies. We have witnessed the time-lapse growth of warehouse layout strategies for over a decade. In layout planning, we cover zone classification, shelf management, time and motion study, mobility and accessibility, safety and security provisions, and more.

SOP Development: Becoming process-oriented is one of the salient features of lean. If warehouse operations are run on ad-hoc and unplanned ways of working, applying lean becomes more challenging. Also, the operations would deviate from business prerogatives. The answer lies in developing and implementing Warehouse Standard Operating Procedures. Again, SOP development is one of our core specialities. Our experts ensure that there is proper incorporation of lean practices in the warehouse SOPs.

IT Integration: Technology has been a big leverage to businesses in automating many manual works, simplifying complex and big tasks, and achieving scale. It also helps in the implementation and sustenance of lean principles and practices in warehouse management. Here, BPX helps businesses identify and integrate the best-fit IT solutions for achieving lean warehouse management. Our team ensures that the business software applications are aligned with the lean principles and practices desired to be implemented.