Lean Warehouse 101

Industrial Solutions - ISI www.isiworld.net
Lean Warehouse 101
w/ Live Simulation
Standardized Work Batch Reduction Teams
Quality at Source
5S System Visual Controls Facility Layout
POUS (Point of Use Storage)
Level FlowPull / Kanban
Culture of
Continuous Improvement
Value
Stream
Mapping

Welcome
• Introduce the instruction team
• What is Industrial Solutions?
• What is the role of the Technology Center
• About the facility
• Ground rules for the class

Course Agenda
Welcome
Introduction to Simulation
Round 1 of Simulation
Introduction to Lean Manufacturing, 8 Wastes
Standardized Work, 5S System, Visual Controls, Facility Layout,
BatchReduction, Teams
POUS, and Quality at the Source, Pull/Kanban
Implementation
Wrap up

Lean Web Sites
www.isiworld.net (Industrial Solutions)
www.lean.org
www.productivityinc.com

Recommended Readings
Lean Thinking
by Jim Womack
Becoming Lean
by Jeffrey Liker
Toyota Kata
by Mike Rother
The Toyota Way & Toyota Talent
by Jeffrey Liker
Building a Lean Fulfillment Stream
by Robert Martichenko & Kevin von Grabe
Lean in Warehousing
by David Graham and Manny Cantone
Everything I Know About Lean I learned in First Grade
by Robert Martichenko

Today’s training with simulation will
• Provide basic lean training
• Show key principles for improving warehousing
operations
• Let us ‘learn by doing’
• Experience the improvements that Lean Thinking
can make in a warehousing operation
We may discover some solutions for some of your
company’s current problems.

Reduced Lead Time
“One of the most noteworthy accomplishments in
keeping the price of Ford products low is the
gradual shortening of the production cycle. The
longer an article is in the process of manufacture (or
in distribution) and the more it is moved about, the
greater is its ultimate cost.”
— Henry Ford, 1926

Lean Is Market Driven
Every morning in Africa, a gazelle wakes up. It
knows it must run faster than the fastest lion or it will
be killed. Every morning a lion wakes up. It knows it
must outrun the slowest gazelle or it will starve to
death.
It doesn’t matter whether
you are a lion or a gazelle
— when the sun comes
up, you had better be
running.

Defining Lean
Lean is:
“A systematic approach to identifying and
eliminating waste (non-value-added activities)
through continuous improvement by flowing the
product at the pull of the customer in pursuit of
perfection.”
— The MEP Lean Network

Simple Lean:
Developing People
Eliminate Waste
Creates Flow
Satisﬁes the Customer
To see and
which
that

Definition of Value-Added
Value-Added
Any activity that
increases the market form
or function of the product
or service. (These are
things the customer is
willing to pay for.)
Non-Value-Added
Any activity that does not
add market form or
function or is not
necessary. (These
activities should be
eliminated, simplified,
reduced, or integrated.)

Ways we experience Waste:
• Incomplete/late data
• Inaccurate data
• Rushed work
• Insufficient training
• Misplaced
• Poor layout
• No Standard Work
• Count errors
• Priority- Hot Order
• Starting-stopping Work
• Typo
• Can’t Read
• Equipment Problems
• Technology Issues
• Insufficient Stock
• Old Stock
• Damaged Stock
• Too Much Paperwork

Lean = Eliminating Waste
Typically 95% of all lead time is non-value-added.
Value-Added Non-Value-Added
•  Overproduction
•  Waiting
•  Transportation
•  Processing
•  Excess inventory
•  Errors
•  Excess motion
•  Underutilized people

Work Place Organization
A safe, clean, neat arrangement of the workplace
provides a specific location for everything, and
eliminates anything not required.

Facility Layout
• Causes of waste:
- Unfavorable facility or shelf / floor layout
- Poor workplace organization and housekeeping
- Not organized to flow product easily through
- Misunderstood work flow for moving product
- Lengthy distances and excessive effort to
accomplish work
- Poor lighting and air handling
**Your pick path will become more predictable if
you have good storage design with less cycle time
variation in your work tasks.

Standardized Work
Operations safely carried out with all tasks organized
in the best known sequence, and using the most
effective combination of these resources:
•  People
•  Materials
•  Methods
•  Machines
A STABLE PROCESS MUST EXIST BEFORE
IMPROVEMENTS CAN BE MADE!!!!!!!!!!!!

Management’s Role Changes
• Management becomes significantly present on the
work floor
• Their roles shift from being problem solvers to that
of coaches, teachers, and mentors to their team.

Batch and Queue Processing
Impact of Order Numbers Picked Reduction
10 min.
30+ min. for total order, 21+ min. for first piece
Find-Pull
10 min.
Count-
Repack
Consolidate
10 min.
Count-
Repack
Find-Pull Consolidate
Continuous
Flow
Processing
12 min. for total order,
3 min. for first part

Lean Workforce Practices
• Teams
- with rotation of highly specified jobs
• Cross-trained and multi-skilled employees
- who can work many operations within the
warehousing processes
• Continuous improvement philosophy; Problem-
solving
• Process quality, not inspection
• Use of participatory decision-making
- team-based problem-solving, suggestion
systems, Kaizen events, etc.

Point Of Use Storage (POUS)
• Parts are stored at / near where packed
• Works best if vendor relationship (Collaboration)
permits frequent, on-time, small shipments
• Simplifies physical inventory tracking, storage, and
handling

Quality @ Source
•  Embrace the golden rule of ‘quality at the source’ and mistake
proofing in a lean warehouse!
•  Errors are just mistakes –
- 1. Never make one
- 2. Never take one, but if you do…
- 3. Never pass one on.
The empowering message to team members is… we all own
our work! It’s my job to do it correctly the 1st time.

Push versus Pull Systems
Push System
Resources are provided
to the consumer based
on forecasts or
schedules.
Pull System
A method of controlling
the flow of resources by
replacing only what has
been consumed.

Pull System
Pull System is a flexible
and simple method of
controlling or balancing
the flow of resources
Eliminating waste of
handling, storage,
expediting,
obsolescence, repair,
rework, facilities,
equipment, excess
inventory
Pull System consists of:
•  Production based on
actual orders
•  Small lots
•  Low inventories
•  Management by sight
•  Better communication

Lean Building Blocks
Standardized Work Batch Reduction Teams
Quality at Source
5S System Visual Controls Facility Layout
POUS (Point of Use Storage)
Level FlowPull / Kanban
Culture of
Value
Stream
Mapping

Old Adage:
“If you always do what you always did, you’ll
always get what you always got.”
Competitive Corollary:
“If the other guy gets better, you’re going to get
less.”

Bridge Analogy
•  The idea is to push your people and the organization across
that bridge as quickly as possible to get to the new way of
thinking and doing the work.
•  Then burn the bridge, so there is no way of going back. There
are going to be transition challenges.
•  Your goal is to pass through those challenges as quickly as
possible.

Barriers to Improvement
If we all know we need to improve, the question
becomes: why don’t we?
F
E
A
R

Simply put:
Our Daily Job is:
- Follow standard work at all times
- Continually improve upon that standard

Benefits of Lean
Lead Time Reduction
0 25 50 75 100
Percentage of Benefits Achieved*
Productivity Increase
WIP Reduction
Quality Improvement
Space Utilization
*Typical Benefits of Lean after 2 years of implementation.

Typical Objections Excuses
How should you deal with these objections to Lean?
• “It takes too much discipline.”
• “It takes too long to implement.”
• “My process is too complex, I have to deal with
too many uncontrollable variables; late supplier
shipments, sick people, quality issues, etc.”
• “My process requires picking a large batch of
orders.”
• “It doesn’t make sense in my industry.”
• “It’s unclear to me how Lean will work with my
MRP system.”

Conclusion
Contrast between Lean & Status Quo
Lean
•  Simple and visual
•  Demand driven
•  Inventory as needed
•  Reduce non-value-added
•  Single order processing
•  Minimal lead time
•  Lower ‘Total Cost’
•  Flexible Customer Service
Traditional
•  Complex
•  Forecast driven
•  Excessive inventory
•  Speed up value-added work
•  Multiple order processing
•  Long lead time
•  Lowest cost purchased price
•  Optimized processes individually

Contact Information:
918-280-9051
www.isiworld.net

Lean Warehouse 101

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