Lean Warehousing: 8 Wastes of the Warehouse

lean-warehousingMost lean purists will insist that warehouses are 100% waste due to inventory levels being too high.  However, we in the supply chain world understand that logistics efficiencies, contractual agreements, and even sequencing activities provide for the necessity of warehouses and distribution centers.  So it’s with that mindset we have to see our warehouses as flow through centers that provide both value added and non-value added activities.  Not all touches in the warehouse are value added, but some are “business value added” which means that the customer is not explicitly willing to pay for the activity but it’s necessary to accommodate our current business strategies.

 

Let’s hone in on that segment of non-value added activity, or waste as we’ll call it.  Our job as lean practitioners inside the warehouse is twofold, 1) to perform our daily standard work and 2) to improve the business through the elimination of waste daily.  To eliminate waste daily, we have to know what we’re looking for.  We’re looking for the 8 wastes of warehousing.

1. Overproduction – Overproduction is the purchase of, production of, or execution of, goods or services that have no current or impending demand.  In the warehouse its performing warehouse functions too soon or before an order has been placed.

2. Inventory – When we say inventory, we are not of the dogmatic belief that all inventory is waste.  Inventory prepositioned to buffer against common cause variation is quite necessary in the world we live in.  As we transfer to a pull supply chain it is important that we refrain from excessive inventory.  Excessive inventory is the result of overproduction and not only ties up the cash we have to run the business, but ties up our resources with the ineffective management of our surplus inventory.

3. Conveyance – When a warehouse is infected with levels of inventory that are incongruent with lean inventory management parameters, it is inevitable that the warehouse will have to find places to store the material.  This, along with multiple other causes can lead to conveyance.  Conveyance is the unnecessary carrying and movement of inventory from one location to another.

4. Over Processing – Over processing is similar to overproduction in that it is doing more than necessary, but the processing portion restricts this definition to apply to the process, not the product.  Overproduction would be picking 100 orders when only 50 were due, while over processing would be picking the 50 orders but making the picker perform 3 quality checks  before passing it to the packaging groups, where 2 more quality checks would be performed.  Overprocessing is having too much complexity or too many steps in your processes.  Most warehouse processes, are riddled with extra steps, checks , and confusion which typically causes more mistakes than its counterpart (the simple process with detailed, visual, disciplined standard work, visual management, and poke yokes (simple jigs or process fixes that highlight when an error has occurred before it is passed on to the next sequential step).

5. Motion – Motion is similar to conveyance, but does not include the inventory.  If you pictured pealing the roof off of your warehouse and looking down on all the people jogging around the warehouse going from job to job or process step to process step.  Identify all the people that are walking from one side of the warehouse to the other or from one sku to another because their work isn’t planned and lined up to be sequential and thus minimizing the non-value added motion that occurs.

6. Defects/Rework – We have all heard the cliché advice “do it right the first time,” but we typically don’t appreciate what it means and its implications to our daily work.  A warehouse is one large process in the midst of an even larger process.  If the material came in packaged wrong or with poor quality, then every step thereafter is pure waste.  If the customer receives a poor quality item, the cost of receiving, storing, retrieving, and shipping that item will not be recovered, but will be added to with the cost of a return.  To reduce the waste of rework and defects, a warehouse should build quality into their processes to prevent the passing on of errors.

7. Waiting – Waiting is a broad generic waste that can be applied to machines, materials, information, suppliers, customers, employees, and anything else that has the ability to sit and wait to be processed.  It’s important that we not confuse the waste of waiting with the strategy to postpone work until it’s necessary to complete it.  The critical thing with the waste of waiting is the recognition that time is money, and a lean operation will do all they can to reduce lead time.

8. Knowledge – The most frequently overlooked waste in warehousing is the waste of our employee’s knowledge.  A typical warehouse employee with over a year of experience will know their position well enough, if trained on the 7 prior wastes, to identify all the waste in their daily activity and be able to provide valuable ideas for improvement.  This expertise must be respected and harvested to leverage across the entire warehouse.

The end game of a lean warehouse is not a “point of arrival” but a consistency of focus.  When the warehouse is consistently focused on waste elimination, lead time reduction, and continuous improvement they can say they are on their “lean journey.”

Written by Derek Browning, Lean Deployment Executive at LeanCor