Qualtec's Business Performance Improvement Blog

Warehouses and distribution centers are more and more being thought of as very strategic aspects of the supply chain and can be a gold mine for process improvement efforts.  Think about it, the warehouse directly shapes the experience customers have with your company.  Are products they need in stock? Are they getting what they ordered, when and where they need it? Does their product arrive undamaged, with an accurate invoice and documentation?  The bottom line is that your warehouses and DCs are definitely on the critical path to your customer.

What about other business-centric issues?  Production losses, inefficient pick and pack methods, inefficient use of labor, poor warehouse layout, etc all drain time, resources, and money. Lean, and a well-executed CI program in general, can help you get control of ALL of these things to streamline the entire order fulfillment process, from order receipt to the time of shipping. You can reduce cost, reduce order cycle time, and optimize labor …. And that is a WIN no matter how you look at it.  We’ve worked with a number of warehousing and distribution operations and have seen first-hand the impact that Lean and CI can have.

this short Executive Brief that discusses the importance of CI for companies whose business success is a clear function of effective and efficient warehouse and distribution operations – namely 3PLs.  Relevant reading even if you’re not a 3PL, but have warehousing and distribution operations.

I would argue that it’s difficult to justify NOT using Lean or other basic process improvement approaches in warehousing and distribution operations, as long as you keep it pragmatic and practical:

• Leverage the personnel and talent you likely already have working in its supply chain operations. No “super skills” should be required.
• Do it in a way that your people can coordinate and manage with their “day job” responsibilities. Don’t set up recipe for failure by making it too burdensome
• Make sure eliminating waste and inefficiency is viewed as a major positive, a win-win across the board, not something people fear is going to cost them their job.

Contact me if you’d like to discuss how Lean and continuous improvement might be applied in your warehouses and distribution operations.

It may not be completely intuitive, but  a recent article on SupplyChainBrain.com posed this very question.  The article talks about how manufacturers have, for some time, being willing to rely on extremely cumbersome and sometimes risky global logistics processes in order to achieve a single objective:  to save on manufacturing labor and increase their ability to compete.

However, there is a realization among more and more manufacturers that there are some very real downsides to these complex global supply chains and that an alternative approach is viable  – an approach known for many years as lean production.

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When I saw this article, I remembered an interview I saw on CNBC earlier this week.  The CEO of Boeing discussed how too broad of an offshore, horizontal supply chain that incorporated too much engineering was to blame for the massive delays in their new 787 deliveries.  He talked about how he would be on-shoring more of his supply chain.  He didn’t use the word lean, but he was talking about exactly what this article discusses.

Give it a read and let me know what you think.

Charlie Jacobs, Director of Process Improvement for APL Logistics, recently wrote a short article for inboundlogistics.com titled Lean: The Next Best Thing to ‘Clip-and-Save’.  In this article, Charlie laid out 3 mini case studies of simple lean projects that yielded extraordinary results. 

His point, backed up by his own results, was that it is difficult to justify NOT using Lean or other basic process improvement approaches in warehousing and distribution operations. The 3 successful cases had elements that should make them attractive to any manager:

• Each was implemented by the same type of personnel and talent your company probably has working in its supply chain operations. No special skills required.
• None required so much of any one resource’s time that it interfered with their ongoing job responsibilities. Their day  job did not suffer.
• And no one misses the waste and inefficiency they ultimately eliminated. It was a win-win across the board.

APL is a long standing Qualtec client, and we feel privileged to have been part of the success Charlie has had with APL’s ACI program. It is a model that a lot of warehousing and distribution centers might be wise to follow.

Contact me if you’d like to discuss Lean for warehousing and distribution operations.

A recent  supplychainbrain.com article made the argument that companies should look  to the warehouse/distribution center floor for some of the biggest and simpliest productivity improvements.   Warehouses and distribution centers are in most cases mission critical components of the overall supply chain, but seem to get very little attention when it comes to optimization.  A careful analysis might show:

Now, what can you do about it.  A focused effort to analyze the underlying processes, not the activities, of the warehousing operation may provide a cost-effective answer.  There are process improvement approaches (i.e. Lean, BPM, Six Sigma, etc) that are proven in other areas that, when applied correctly, can make a dramatic positive impact to operations. At a high level, these approaches seek to understand the core processes, identify to the highest value performance gaps, and leverage proven approaches to implement improvements. Where might focus be directed? 

In the article Charlie Jacobs discussed how APL Logistics rolled out a simple lean based continuous improvement  program that made improvements in several of these areas, saving one customer over $1M. That should raise some eyebrows!