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Lean Warehousing Is the Only Way to Stay Competitive in the Industry 4.0 Era – Here’s Why

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What to expect: Discover the steps to creating a lean warehouse, like building a lean culture among warehouse workers, writing effective SOPs, going on regular “Gemba” walks, using digital training tools for a healthy, informed workforce, and more.

Table of Contents

  1. Creating Repeatable, Scalable Processes
  2. Standardizing Processes
  3. Taking “Gemba” Walks
  4. Hiring the Right Talent
  5. Training Workers Well

What Is Lean Warehousing?

Naturally, warehousing best practices have changed over time. Currently, warehouse management styles like “Six Sigma”, “kaizen”, or “just-in-time” are everywhere. Ultimately, all these styles are part of lean logistics. A lean warehouse is focused on constant improvement. Lean warehousing means saving time, money, space, and energy at every point in the warehouse’s operations (Minghini, 2020). 

Lean warehousing increases the value of the warehouse in the supply chain. It is a tactical way to stay relevant in the industry 4.0 era. In general, tactical lean warehousing means asking two questions (LeanCor, 2021):

  • How can your warehouse benefit from leaner operations?
  • What steps can you take to make your warehouse leaner?

Lean Warehousing: Creating a Lean Culture 

Of course, there are many ways to make your warehouse lean. However, a lean warehouse is more than just quick and cheap operations. Instead, the foundation of lean warehousing is lean culture and lean processes. A lean culture values people and encourages them to improve the warehouse. In sum, lean is a way of thinking about people and processes in your warehouse. 

How to Make Your Warehouse Lean

You can create a lean warehouse by:

1. Creating Repeatable, Scalable Processes 

At first, lean processes should start with leaders in the warehouse (LeanCor, 2021). Next, decide what can be improved, or if a change is useful. Then, include the warehouse workers in the new lean process so that the whole team is working together. Of course, there is more risk of mistakes or variations in quality with larger teams. Thankfully, you can avoid this problem by writing efficient standardized operating procedures (SOPs).  

2. Standardizing Processes

Standardizing warehouse operations has many benefits. For example, good SOPs are easy to follow. As a result, it is easier to see if an SOP is working or how cost-effective it is. Furthermore, a lean culture lets managers or workers suggest a change if an SOP is not working (LeanCor, 2021). Standardizing processes creates a lean warehouse by ensuring:

  • Documentation

Standard processes help “all of the warehouse players know where they need to be and what they need to be doing” (Minghini, 2020).

  • Consistency

A lean warehouse needs stability. First, understand what your resources are. This includes people and equipment. Second, create a plan to increase or decrease your resources as needed. Remember, a lean warehouse culture values worker input (LeanCor, 2021).

  • Easier Training for New Workers

Effective SOPs are simple and easy to explain. As a result, training new workers is easier. Long and complex training is hard for workers to follow (Kane Logistics, 2021). In some cases, this is dangerous. Health and safety training is only effective if everyone is trained the same way.

  • Reductions in Injuries and Strain

Unfortunately, some warehouses confuse lean warehousing with ignoring safety to boost profits. However, occupational health and safety in modern warehouses are crucial. 4.4 per 100 full-time transportation and warehouse workers were injured at work in the U.S. in 2019 (Bureau of Labor Statistics, 2019).

SOPs reduce injuries in the workplace (LeanCor, 2021). For one, standardized fire safety and first aid training ensure workers can prevent and handle emergencies. Furthermore, SOPs teach workers how to move safely at work. This reduces injuries or physical strain caused by bad posture, improper lifting and carrying, or repetitive motions (The TOPS Program, 2014).

  • A Baseline for Improvement Activities

Lean means constant improvement. Naturally, a warehouse’s needs change over time. Therefore, processes in a warehouse need to be updated quickly. Standardization makes keeping good documentation easy. Consequently, you can easily compare new data with old data (the baseline). Additionally, a lean warehouse is proactive. Lean warehouse management can use baseline comparisons to predict what changes to make. As a result, the warehouse succeeds because it meets the new supply chain demands right away (Minghini, 2020).

In general, leaders should spend time listening to workers. Include the whole team in solving problems. Also, encourage workers to be proactive.  Basically, a lean warehouse culture is open to suggestions from everyone (LeanCor, 2021).

3. Taking “Gemba” Walks

Gemba walks are another great way to build a lean warehouse. “Gemba” is a Japanese word meaning “the real place”. In lean management, “Gemba” is wherever your team’s work is happening. In this case, it means the warehouse floor (Kanbanize, 2021). Leaders should invest time in seeing the warehouse operations for themselves. Moreover, they should listen to the workers’ ideas and explanations.

4. Hiring the Right Talent 

Recruiting good warehouse workers is important in a lean warehouse. Currently, there are fewer supply chain workers than are needed to meet demand by a ratio of 6:1, or even 9:1 in some cases (Henderson, 2020). To hire the right talent, be a competitive employer. For example, you can attract the new generation of warehouse workers with flexibility and digital recruiting and onboarding methods. Employing and training older workers is another solution to the talent shortage.

5. Training Workers Well

There are common challenges when training warehouse workers. A lean warehouse looks for ways to make training better. Also, it invests in the tools to make that happen. For example, skilled warehouse worker trainers can successfully implement new training methods. Digital training helps workers adjust to their warehouse jobs quickly and safely. Most importantly, lean management values safe and happy workers as much as lean operations and happy customers. Encourage teamwork among workers. Regular stand-up meetings where workers can openly talk about problems and ideas are key to a lean culture (LeanCor, 2021).

Why Lean Warehousing Is the Only Way to Stay Competitive in the Industry 4.0 Era

Covid-19 heightened the e-commerce boom. As a result, the shortage of manual workers is worse than before (Totolo & Baijal, 2020). Furthermore, the e-commerce boom has increased the demand for supply chain professionals over the last 5 years (Kaplan, 2018). A post-COVID-19 world may rely more on digital services like e-commerce. Proactive lean management lets you adapt your warehouse to this new normal quickly. Consequently, your warehouse is better positioned to thrive in the industry 4.0 era.

How Digitalization Boosts Lean Warehousing

Many warehouses are hiring more temporary workers to keep up with high demand. Quick, efficient onboarding of temporary workers is easier and faster with digital training. Firstly, it gives workers standardized information. Secondly, built-in translation software trains employees in their native language. The warehouse industry is digitalizing (Newcastlesys, 2021). Going digital helps you in two ways:

  1. You can stay competitive as an employer in the industry 4.0 era. Digital training connects you to the new generation of warehouse workers.
  2. Benefit from this big change. Think of the pandemic as a reset button. You can decide what the future of your warehouse looks like after COVID-19. Using digital tools to make your warehouse leaner is a great way to start off on the right foot.

The Benefits of Lean Warehousing

In summary, lean warehousing creates simple standards and a positive workplace culture. As a result, you reduce mistakes, injuries, miscommunications, and variations in quality in your warehouse. Ultimately, lean warehousing:

  • boosts efficiency
  • saves time
  • cuts labor costs

There is no one way to make a lean warehouse. Rather, lean is a philosophy to guide you through the industry 4.0 era. Therefore, there are no strict rules to follow.  First, understand your company’s objectives, resources, and culture. Then, use the tips in this article. Finally, find what works best for your warehouse and keep improving (Kane Logistics, 2021). 

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References

26 Best Practices in Lean Warehousing | LeanCor, A Transplace Company. (2021). Retrieved 7 February 2021, from https://leancor.com/blog/26-best-practices-in-lean-warehousing/ 

Gemba Walk: Where the Real Work Happens. (2021). Retrieved 7 February 2021, from https://kanbanize.com/lean-management/improvement/gemba-walk 

Henderson, J. (2020). Hong Kong leads the way for most expensive rents in prime logistics hubs | Logistics | Supply Chain Digital. Retrieved 7 February 2021, from https://www.supplychaindigital.com/logistics-1/hong-kong-leads-way-most-expensive-rents-prime-logistics-hubs 

Kaplan, D. (2018). Warehouse recruiters get creative as labor crunch tightens. Retrieved 7 February 2021, from https://www.supplychaindive.com/news/warehouse-labor-shortage-recruiter-adapt/523563/ 

Minghini, J. (2020). ​Embracing Lean Logistics Philosophies In The Warehouse. Retrieved 6 February 2021, from https://blog.kencogroup.com/embracing-lean-warehouse-logistics 

The Ecommerce Warehouse of 2021. (2021). Retrieved 7 February 2021, from https://www.newcastlesys.com/blog/rethinking-your-picking-process-for-2021-0 

The Pitfalls of Lean Warehousing Programs and How to Avoid Them. (2021). Retrieved 7 February 2021, from https://www.kanelogistics.com/blog/how-lean-is-lean-pitfalls-of-lean-warehousing

The TOPS Program. (2014). Warehouse Staff Safety Guide [Ebook]. Retrieved from https://www.fsnnetwork.org/sites/default/files/save_the_children_cm_wh-staff-safetyguide_final_1ed.pdf 

Totolo, E., & Baijal, H. (2020). How a pandemic-induced boom in e-commerce can reshape financial services. Retrieved 7 February 2021, from https://blogs.worldbank.org/psd/how-pandemic-induced-boom-e-commerce-can-reshape-financial-services 

U.S. Department of Labor | Bureau of Labor Statistics. (2019). Employer-Reported Workplace Injured and Illnesses [Ebook] (p. 5). Retrieved from https://www.bls.gov/news.release/pdf/osh.pdf 

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