Lean Warehouse: Low-Hanging Fruit

Transcription

1 Chapter 8 Lean Warehoue: Low-Hanging Fruit Lean i till in it early tage in upply chain and logitic, o it i ometime difficult finding a place to tart it. A place that many companie have found a a good place to tart i the warehoue, which wa dicued briefly earlier in the book. In the 21t century, the warehoue i becoming a trategic tool to be ued for a competitive advantage. Warehoue today are ditribution center upporting a JIT upply chain that i low cot, flexible, and efficient, epecially in the rapidly growing world of e-commerce. E-commerce growth affect both the warehoue and the inbound and outbound logitic that upport the facility. Lean Thinking in the Warehoue In The Skinny on Lean, Peter Bradley cite the following five-tep proce a a guide to implementing Lean principle, which can be applied to the ditribution environment a well a manufacturing: Identify what your cutomer expect and determine what value you add to the proce. For ditribution and logitic, that uually mean greater velocity. What it doen t mean i a lot of handling. Ditribution people aume all the handling they do add value, but cutomer don t ee it that way. No cutomer ak if a product ha been touched a lot, Womack ay. Mot people jut want their product. All thoe touche from a cutomer tandpoint are irrelevant. From an end cutomer tandpoint, le logitic i better. 87

2 88 Chapter 8 Lean Warehoue: Low-Hanging Fruit Plot the value tream. Identify all the tep involved in moving good through the ytem. Womack and Jone encourage the ue of value-tream mapping literally diagramming all the tep in the ditribution proce, from order to delivery. That diagram may help you pot activitie that add no value o that you can eliminate them. Make the proce flow. Dimantle any roadblock that prevent the free flow of material through the facility. Pull from the cutomer. The lean ytem i a pull ytem, drawing material and merchandie into the ditribution network baed on what cutomer want (not on hazy forecat). Purue perfection. Root out any remaining wate. Then do it again, and again, and again. [Bradley, 2006] The fact i that mot Lean concept can work well in the warehoue, epecially 5S (uually the firt activity to do a a good foundation for a Lean program), value tream mapping (VSM), team building, kaizen, problem olving and error proofing, kanban/pull ytem, line balancing, and cellular application and general wate reduction. At firt glance, many warehoue are very neat and organized, at leat in the cae of pure ditribution companie, and perhap le o at manufacturer (not their area of expertie!). However, once you get under the hood, there are plenty of opportunitie to be found. Aembling Order Warehoue operation eem to be very active, with people and equipment in contant motion. However, thi doe not mean they are productive. Order do not necearily keep moving. They tend to pile up and it, waiting between proceing tep, cauing clutter and taking up pace (all form of wate!). An analyi done around 2006 of a ditribution operation, a decribed in Are Your Warehoue Operation Lean? by Ken Gaunt howed that a typical order wa only being worked on 38 percent of it cycle time; 56 percent of the time order were idle while the remaining 6 percent involved employee dealing with problem uch a waiting for equipment, computer iue, interruption, and blocked aile.

3 Lean Thinking in the Warehoue 89 To radically improve thi type of performance, warehoue order hould be looked at a being aembled in the mot efficient manner, minimizing non-value activitie including delay in receiving, putting away, picking, packing, and loading, a well poor picking path, wated motion, congetion, and poor equipment condition and availability. For example, the order could be aigned baed on the amount of time or batche that it take to pick line item (etablihed in time motion tudie), intead of jut giving an entire order to a picker. Picker would be aigned zone. They would then feed worktation in regular interval to keep product flowing and o that packer and loader are not kept waiting. In general, you want to look at aile and rack layout to improve pace utilization, make ure product are arranged o that the mot frequently ued item are cloet to hipping to reduce travel ditance; heavily ue viual ytem for aile, rack, product, and workflow; avoid cluttered and blocked aile; and create houekeeping ytem to improve efficiency by enuring tool and equipment are available when and where they re needed. [Gaunt, 2006] Value Stream Mapping in the Warehoue A good way to attain better flow i to tart with VSM. The value tream map will give employee an overall view of all warehoue activitie, which allow them to ugget improvement in other area, a well a their own. It i a good way for everyone to undertand and agree on how the facility work and to come up with idea for improvement. Diplay the current and future tate map in the warehoue o that employee are able to ee previou improvement and take part in the ongoing effort. To ae the operation uing a value tream map, you need to involve the operator and upervior, identify Lean improvement and kaizen, quetion every activity, treat the warehoue like a large taging area, develop jutification a you go along, implement the Lean improvement uing the VSM plan, and then tart the cycle again. 5S or workplace organization ( a place for everything and everything in it place ), while eemingly imple, i a good place to tart, and it i ometime urpriing how much time people wate earching for thing.

4 90 Chapter 8 Lean Warehoue: Low-Hanging Fruit Lean Tool in the Warehoue In order to get any of thi done, a team approach i neceary to identify the wate in area uch a error (receiving, put away, picking, loading, etc.), inventory inaccuracy, damage, afety, and lot time. Lean tool, uch a problem olving (root caue, fihbone, etc.) and error proofing with tandardized work (e.g., viual intruction on how to ue a trapping machine or how to load/unload a truck) can alo be helpful in the warehoue environment. Pull ytem uing kanban are a natural in a warehoue for everything from packing material to form, a well a product aembly and kitting. If you do any value-added activitie uch a kitting or aembly, a many 3PL do, then work cell might be appropriate to minimize labor and maximize the ue of equipment and pace. Line balancing i a tool that can be ued in thi type of ituation not only in taffing, but alo to enure proper flow in the work cell. There even a place in the warehoue for total productive maintenance (TPM or equipment-related wate) a there plenty of equipment (ome automated) that might not be running a efficiently a poible (e.g., carouel, forklift, hand truck, trapper, etc.). Lean Warehoue Example Menlo Logitic, a major 3PL provider, ha not only implemented Lean at many of it facilitie, but alo ue it a a competitive weapon a can be een at their Web ite under Lean Logitic ( where they point out the following area where they look for wate: Mapping material flow in tudying material flow from raw material vendor to cutomer finihed good, we challenge each point

5 Lean Warehoue Example 91 at which material flow i topped. Method to peed up material flow include hipping ocean container directly from Aia to inland regional warehoue, intead of tranferring cargo to truck at the port of entry, and bypaing warehoue with large order that travel directly from factory to cutomer. Keeping driver and tractor moving the interface between warehouing and tranportation can often reult in wate. We attack thi problem by working with our carrier to drop trailer, freeing the driver and tractor to pick up a loaded one and keep moving. Through careful dock cheduling and ynchronization of warehoue workflow, we can live-load hipment quickly, minimizing driver dwell time. Uing milk run milk run reduce tranportation cot and build more conitency into an inbound upply network. Electronic data interchange (EDI) Menlo Worldwide Logitic make extenive ue of EDI and RoettaNet to pa data among our upply chain partner. Communicating data electronically eliminate error caued by manual data entry. Warehoue efficiency Menlo Worldwide Logitic team of indutrial engineer deign warehoue layout that treamline inbound and outbound flow, maximize labor efficiency, and deliver high pace utilization. We employ technique like dynamic lotting, cluter picking, tak management and ytem-directed putaway to optimize labor and pace efficiencie. Optimize tranportation route Menlo Worldwide Logitic LMS application optimize each load to meet delivery date with low-cot mode and carrier election. Packaging optimization We work with cutomer to explore the ue of returnable container for repetitive hipment to factorie. For finihed good, we can tudy packaging ize to uncover way to increae pallet and trailer utilization. Small change in carton ize can facilitate better torage utilization and lower tranportation cot. [ 2011] Furthermore, Menlo emphaize the ue of mitake-proofing tool uch a: Making it eay to do thing right and making it hard to do thing wrong

6 92 Chapter 8 Lean Warehoue: Low-Hanging Fruit Eay-to-read viual control Radio-frequency device coupled with bar-code technology Sytem-directed cycle counting at our warehoue Utilization of Six Sigma and SPC ISO procee Electronic data interchange (EDI) Standardized procee Implement repeatable, tandardized procee Etablih one bet way to perform each tak Viual documentation of procee Correct any activity that caue rework, unneceary adjutment or return Organized workplace (5S) [ 2011] All of thi reult in benefit to their cutomer uch a better ervice, lower cot, higher availability, higher cutomer atifaction, and more reliable deliverie. Thi in t jut talk either, a wa pointed out by Gary Forger in Menlo Get Lean. It decribe how Menlo Logitic operate a 250,000 facility in Michigan that had recently hipped 8,000 order in a 2 week period with no error and according to a recent audit ha inventory accuracy of percent. Thi ite wa the pilot ite for their Lean program (along with a dozen other Lean warehoue at the time) with a goal to reduce the cycle time and increae productivity of variou reource by eliminating wate. Menlo focue their metric on ervice, quality, delivery, cot, and employee morale. Warehoue operator work in 20-minute egment or mall batche imilar to what wa mentioned earlier in thi chapter. That maximize flexibility and allow labor to help minimize repone time to order. Item are lotted according to ize and velocity, and worker are aigned certain aile to keep neat and organized (and mut ign off on a checklit). Team leader own their procee, upervior and manager remove road block, and bonue of hourly team member are tied to metric and improved procee (a real key to ucce, I believe). Beide weekly departmental meeting to dicu performance and improvement, every month a kaizen event i held in which a many a ix worker concentrate on improving an operation. [Forger, 2005]

7 Lean Warehoue Example 93 Peter Bradley in The Skinny on Lean tated that Menlo Worldwide report that warehoue productivity improved 32 percent between January and November lat year, meaured by gain in line per hour. Defect, meaured a the error rate, dropped by a whopping 44 percent. The on-time percentage for hipment wa north of 99 percent in every one of thoe month, hitting 100 percent in eight of 11 month. And thoe involved think they can do more. [Bradley, 2006] Another major 3PL player, Ryder Logitic, highlight their Five LEAN Guiding Principle on their Web ite ( which provide the foundation for operation excellence, continuou improvement and upply chain efficiency. The guiding principle are: people involvement, built-in quality, tandardization, hort lead time, and continuou improvement. Ryder alo mention uing a variety of Lean tool in their buine, uch a workplace organization, viual management, work cell, tandardized work and even a Lean Academy. They not only include Lean application in the warehoue operation, but tart with determining the optimal ditribution network deign, which can ignificantly reduce wate in the overall upply chain network. They take thi very eriouly. A Ryder cae at the ite decribing how they took over Whirlpool ervice operation how how continuou improvement activitie reduced cot, improved hipment accuracy and order cycle time, and booted overall efficiency. The firt thing they determined wa that it wa more efficient to conolidate Whirlpool variou ervice facilitie into one location. After that, they implemented a variety of continuou improvement effort, including the creation of an inventory profile that identified the bet torage location for each part to improve efficiency of order picking, improved workflow procee leading to more efficient ue of labor, and collaboratively enhanced the exiting WMS ytem that enabled them to treamline the operation further. Ryder then keep track of five key performance indicator (KPI) on a monthly bai (the firt four of which are alo meaure of wate): hipment accuracy, inventory accuracy, order fill rate, order cycle time, and budget performance. [ 2011] The point of thee example i to how that not only i the warehoue an ideal place to tart a Lean upply chain and logitic journey, but that it can give you real reult and a competitive advantage in the marketplace.

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