Lean Warehouse Strategy: Ready, Aim, Fire

“Beep…Jonathan Smith to receiving, Jonathan Smith we need you in receiving right away!…Beep”  It’s quite common to encounter a firefighting culture in the warehousing industry.  Warehousing is an industry plagued with a minimum visibility to the volume of orders to be dropped at any given moment, customers demanding increasing response time to orders, and in many situations an inability to control the inventory at their own facility.  The orders drop, the carrot and stick methods submerge, the strongest survive, orders get out the door, and weekend meetings and overtime are put on the calendar to provide an outlet for supervisors to complain about instability and backlogs.  The cycle continues day to day and year to year, while the only thing that sustains is turnover and overtime.

leancor_062015_0026

In those weekend meetings it’s typical to hear the buzzword lean thrown around without a practical application.  So let’s face practical reality:  forecasts will lie, demand will vary, and inventory may never be in our control.  In spite of that, lean truly has a practical application.  Let’s explore the application of a basic lean concept: Deming and Shewhart’s PDCA cycle.  Also referred do as the Deming cycle or Shewhart cycle, the PDCA (Plan, Do, Check, Act or Adjust) cycle is just what the practical doctor recommended for your warehouse ailments.

PDCA is a scientific approach to process execution and improvement.  The cycle is initiated with a “plan” where objective targets are identified, agreed upon, and assigned to champions that will drive completion.  In a warehouse picking operation this could be an hour by hour schedule of how many orders need to be picked, or at a higher level what improvement projects we want to accomplish in a given period of time.  The next logical step is the “do” stage in which we actually execute the plan.  Most “average” operations can do the first two steps of the cycle relatively well.  It’s quite easy to say, we need to get better at this or we need you to pick 24 lines this hour.  The differentiator for a warehouse is what they do when objective goals are exceeded or unmet.

The “check” stage of the PDCA cycle provides a repetitive and methodical approach to monitor the execution according to the plan.  If hour 1 has passed and only 12 lines were picked a 5 why is performed to understand what problems occurred in the process to prevent the plan from being met.  These problems are addressed quickly and systematically so they do not arise again.  Rather than throwing people or overtime at problems to cover them, preventative measures are put in place as a part of the “act or adjust” phase.  In the instances where 34 lines are picked the process is dissected to be better understood and the improvements are leveraged across the entire warehouse.

The adjustments, when executed properly become the next plan and thus the cycle continues.  The 34 lines picked become the new standard, and every time someone does not meet that standard you repeat the 5 why problem solving eliminating the problems that exist while leveraging other opportunities to raise the bar.

The continuous use of Check and Adjust separates excellent execution from firefighting to the finish.  A constant commitment to firefighting will get the job done most of the time, but over time, will use more resources  and will not provide an improvable standard.

Lean methodology is quite contrary to the traditional carrot and stick methods that do not often sustain results.  Traditional carrot and stick methods often struggle to leverage and sustain growth.  The “rabbits” will continue to produce above expectation results while being commended for results attributed to their work ethic and personality attributes, while the “turtles” will continue to find dissatisfaction with their work, lose motivation, and leave the situation.

To quickly pull a warehouse from a firefighting frenzy into a disciplined cycle of PDCA, it’s impractical to launch a warehouse-wide campaign after a 20 minute meeting.  Spend quality time creating a plan with targeted implementation dates, gain agreement from your team, and launch PDCA in one area, preferably in an upstream process that will not be affected by prior steps performing erratically.  As PDCA is put in place from functional area to functional area, do not forget to check and adjust.  As you roll out from area to area leverage the gains from one area to another and consistently engage all employees in the offering of feedback.  If at any point the deployment  or sustainment of the PDCA cycle fails to improve the situation, do not use that as an excuse to abandon all efforts, it is only something that should be “checked” upon using solid problem solving methods to isolate and eliminate the problems that are preventing improvement from occurring.

A lean warehouse is a warehouse that learns from both failures and successes.  Is your warehouse firefighting, or fireproofing?

Written by Derek Browning, Lean Deployment Executive at LeanCor