Best Practise Warehousing – How can you maximise value from your warehouse – and achieve the highest levels of employee engagement!
Unipart’s expert practitioners explain how you can recognise waste, increase added value and reduce the cost of service in your warehouse network, fundamentally underpinned by highly engaged employees.
At the core of any successful warehouse network are the employees. Organisations must have a passion for engaging and developing people at all levels, this is when people really make the difference.
People can enable an organisation to deliver enhanced productivity, together with sustained innovation, through a workforce that is engaged in building the business, generating ideas and solving problems. At Unipart, we call this ‘Performance through Engagement.’
Although none of what this article covers below is ‘rocket science’, it can be extremely challenging to achieve and near impossible to sustain in a busy warehouse environment. Once you start turning the wheel of improvements, you must keep it rolling. Without careful nurturing, there is a great temptation to fall back into old habits – especially if the new approach requires more work to be done up front, in order to improve productivity and efficiency down the line. Sustainment therefore requires specific detailed attention, and each change needs a tailored approach, whether behavioural or operational.
Allowing the people who use the processes to take part in improving solutions, will increase the breadth of benefits that your company can realise. Warehouse operatives have a good understanding of how existing systems and processes waste their time, and strong opinions about how things could be done better. Engagement empowers them to make the necessary changes and identify other quick wins for your business. Incremental changes such as better positioning of fast moving products, or improvements to handling techniques can add up to significant gains. Any capital investment, such as mechanisation, can also be more targeted and will be better received by the workforce if they are involved in recognising the potential benefits.
Warehouse labour and rental costs are rising; therefore getting the best possible value out of your facilities is essential. Increasing customer demands, are leading companies to require improved accuracy, service, choice, consistency and flexibility from their warehousing operations. Many warehouse managers find themselves challenged by lack of storage space, rising customer service levels, and spiralling bills for overtime and temporary staff. Unfortunately, most organisations’ current operational process will not rise to these challenges.
Many believe the answer lies in technology. The choice of tools, systems and innovations available to warehouse operators has never been greater: self-driving fork-lift trucks, storage shuttle systems and pick-by-light technologies are all offered as productivity boosting solutions, attracting huge investments from big names in the industry. Effective as they can be, the capital cost, complexity and inherent risk of these options make it difficult for most companies to know if they are good choices for their business.
Fortunately ‘lean’ approaches have a lot to offer, however, very few warehouses have successfully put them to practical use and realised the true benefits they can deliver. By focusing on value added activities and systematically eliminating waste, costs can be cut and services can be improved without the need for significant investment. To succeed, businesses must begin with the basics, asking awkward questions, the first among them: “What are our warehouses actually for?”
Using Value Stream Mapping to Understand Added Value
Passionate lean practitioners may claim that warehouses add no real value at all, that they are either an unfortunate necessity or an outright waste – asserting that direct delivery, information transparency and supply chain integration can significantly reduce the need for warehouses.
However, for most supply chains this is not the case, a value stream mapping exercise will help reveal the 3 main ways most warehouses add value.
- Consolidating products from different sources and suppliers into customer orders.
- Holding stock that is quickly available to the customer, shortening the lead times they experience and smoothing over fluctuations and seasonality in demand.
- Housing value added activities such as packaging, customisation, kitting, cross-docking, scheduling, sequencing deliveries and managing returns.
From Unipart’s experience, the mix of ways that value is added is different for every warehouse: for an aircraft spare parts warehouse, having stock immediately to hand is essential to minimise costly down time; for a book retailer, consolidating products from multiple publishers to meet orders is the primary customer requirement; for a building material distribution company, it might be that kitting, prefabrication and safe packaging adds the most value.
Once the true value add has been identified and quantified, processes and systems can be reorganised and redesigned. There are some key principles to keep in mind when doing this:
- Keep the focus on the customer, understand the customer’s needs and modify the process to improve the customer experience.
- Measure the productivity of your value added activities, baseline them and track the improvements from the changes you are making.
- Educate the workforce, training them to spot waste at their own level and share their learnings.
Most Lean texts traditionally refer to 7 areas of wastes: Transport, Inventory, Motion, Waiting, Over Supply, Over Processing and Defects. There have been many contenders for the “eighth waste” including environment impact, unused skills and poor space utilisation. All of these are worth considering when looking for the waste in your processes.
Begin in the areas where costs are concentrated to realise the biggest savings; in the case of warehouses, picking activities are a good place to start. On average picking accounts for around 60% of all labour costs, analysis reveals that almost 80% of picking time is spent traveling to and between picking locations. In some cases, as much as 25% of the entire running cost of a warehouse can be attributed to this ‘non-value adding’ activity.
The first consideration is the picking method; investing in a ‘goods-to-man’ system can eliminate the majority of walking and if designed correctly for the business can pay for itself in 3 to 5 years. However, they can reduce flexibility and fall subject to single points of failure, with cost of maintenance and repairs rising year on year. By contrast, man-to-goods type picking options have fewer of these risks but make some travel time unavoidable.
Effectively aligning the Warehouse Management System (WMS) with the picking strategy, will optimise the distance travelled by the pickers. An effective picking strategy should look at:
- Correctly sizing and organising pick waves.
- Methods for grouping customer orders for picking and processing.
- How tasks are prioritised and allocated to staff.
- Which activities are performed at the pick face and the processing areas.
Selecting the optimum picking strategy for your operation will greatly reduce the amount of wasted travel time by pickers. In order to understand this fully you must analyse the flow of product from receipt to dispatch, the number of times the product is touched, the amount of time the product is sat waiting and the total distance product travels around the warehouse; when combined with lean storage principles this can vastly improve the picking efficiency of your operation.
At one extreme, a fast moving product might be put away in racking, moved to a picking location, picked as part of a route, and processed through an out sort operation. It might travel more than twice the length of the warehouse, being handled a dozen times or more: none of this activity is value added. Compare this to a cross-docked item which is transferred directly from its inbound unit to an outbound delivery, where the effort and waste are much lower. Fast moving products must be easiest to get to (located in the so called ‘golden zone’), thus requiring the least travel, movement and waste.
Find out how Unipart can help you
Engaging the people who do the job and driving improved performance is at the heart of ‘The Unipart Way’, a set of tools and a mind-set developed over a 30 year long continuous improvement journey, tried and tested across a wide range of industries. The benefits our customers have seen demonstrate it’s true worth, and here at Unipart we rely on it for our competitive edge.
Unipart can help you to find the headroom to get the most value out of your warehouse and help you to sustain that value for the long term. To find out what we can do for you, email: email@example.com or phone +44 (0) 1865 384579.