5 Lean Best Practices for the Warehouse

October 13, 2015

By Anica Oaks

10-13-15_ImageWhile most of today’s warehouses have some plan to operate as efficiently as possible,
it is likely new opportunities still exist to squeeze out inefficiencies. There is a reason why Lean
methodologies are considered a “continuous” process improvement. Things change; suppliers get
added; new employees are hired; and new facilities are added to the mix. Over time, it is inevitable that
a fresh approach to operational efficiency should be performed, with the payoff of identifying a couple
of process improvements that can make an impact on your bottom line, as well as to positively impact
your customers.

With the goal of eliminating waste, the following are five suggestions on how you might remove
deficiencies that are having a negative impact on productivity and profitability. I challenge you to review
these five key organizational standards as possible areas for improvement. Even if just one works, it will
help you to reduce warehouse, and even plant inefficiency, which will then result in improved asset
management performance within your organization.

1. Data Governance

The principles driving “lean” data governance suggest data should be input once, and then recalled
autonomously as an embedded part of as many processes as possible. The opportunity here is to avoid
the need to do clean up, reconciliations, or any other extra work necessary to ensure the integrity and
accuracy of the data is maintained. Every time it is “touched” unnecessarily, that is a wasted effort –
through time spent, wages paid, etc.

The most common way to accomplish this objective is to focus on superior technology tools that can
help to ensure data integrity, standardization of processes and meaningful audit capabilities. All of these
components are critical not only within a warehouse environment, but also across as a cross-
organizational effort to optimize the tracking of inventory and material throughput, within not only your
own warehouse or plant, but out to the extended supply chain as well. Better visibility into these
operations will result in greater accuracy of the data collected, and a reduced need to do clean up later
down the line. Many top-performing organizations realize significant benefits in terms of market
competitiveness when they deploy advanced warehouse technology and reporting tools that privilege
data governance.

2. Inventory Storage Management Solutions

Today, most organizations include warehouse and inventory management within their operations,
production or supply chain management functions. One of the aims of supply chain management is to
optimize inventory throughput by leveraging the value of real-time information concerning the status of
inventory and storage bin utilization. Superior standards call for accurate awareness of inventory while it
is in a warehouse. Effective warehouse design, such as storage systems that provide ready visibility to
Work-in-Process can be an effective tool to achieve superior standards. Vendors such as Quantum
Storage offer Steel Shelving and other products that can assist in this realm.

3. Vendor Compliance Programs

A vendor compliance program communicates to vendors exactly how you want their product to arrive.
Your program should include specific labeling requirements, standard case quantities, advanced
shipping notification standards, or any other policy that you believe will help your plant or factory to
perform more consistently. This strategy is even more paramount your operations are distributed across
a multi-site environment. Standards for any effective vendor compliance program should be developed
through a collaborative effort involving procurement as well as operational personnel.

4. Organizational Culture and Diversity

Language barriers are expected to remain a problem for warehouse manages well into the foreseeable
future. The International Warehouse Logistics Association (IWLA) discloses on its blog that logistics
industry standards and best practices should involve deploying multilingual software and protocols that
encourage managers to embrace diversity in the workplace.

The use of bar codes is one approach that can help to overcome the language barrier. As materials or
Work in Process is received and scanned, these items can then be tracked and managed throughout the
production process without risk of human error in typing in the wrong information as it arrives on a
receiving dock.

5. Cross-Docking

Superior logistics planning includes cross-docking wherever possible. Cross-docking is the practice of
unloading materials from an incoming vehicle and immediately loading these same materials directly
onto outbound vehicles with minimal or zero warehousing interval between. Think of this as “Just-in-
Time” shipping. Cross-docking is an ideal solution when product freshness is paramount. Cross-docking
evolved out of a need to get perishable goods to market quickly. This procedure is one of the key
inclusions an organization can make to its portfolio of standards whose function is to drive
manufacturing and distribution center improvements.

Too many of today’s factories and warehouses have been neglected, improperly designed or inefficiently
operated. Even if a Lean program has been implanted, the opportunity to find new areas for operational
improvement likely still exists. I have presented these five concepts as a challenge for you: Is there one
item here that you could implement? If so, the opportunity to make your plan for next year might be a
step closer! By adopting and enforcing any of the above key operational standards, modern plant or
warehouse managers will be much more likely to achieve their most optimistic operational objectives.

he cold chain refers to the management of the temperature of perishable products in order to maintain
quality and safety from the point of slaughter or harvest through the distribution chain to the final
consumer.

The cold chain ensures that perishable products are safe and of a high quality at the point of
consumption. Failing to keep product at the correct temperatures can result in a variety of negative
attributes. These can include textural degradation, discolouring, bruising and microbial growth. Effective
management of cold chain maintains the quality of a product, which leads to a satisfied customer,
greater demand, and overall protection of public health.

Each sector of the chain, from the point at which product is harvested to the point at which it is sold,
shares responsibility. Breaks in the chain may occur just as easily on a warehouse dock as they do on a
supermarket floor. If one link breaks, all suffer the consequences of an unsatisfied customer.

Management flow of cold chain

The diagram above shows the management flow of cold chain.

Table of Contents

Perishable Goods

Transporting Perishable Goods

Cold Chain Equipment

Transportation of Perishable Goods by Land

Transportation of Perishable Goods by Sea

Transportation of Perishable Goods by Air

Five Methods to Reduce Perishable Food Loss

Conclusion

Perishable Goods
Perishable shrink costs retailers a tremendous amount of money. Vulnerable items such as meat, dairy,
fruit, vegetables and flowers can expire prematurely due to incorrect temperature handling in the
supply chain.

Transportation and interim storage at the distribution centre all affect the final quality of the saleable
product.

Consumers are quick to judge on appearance and remember when a product does not meet
expectations. Perishable food includes fruits and vegetables, fresh meat, foods purchased from chill
cabinets, freshly cooked food stored to be used later. It is usually stored in the refrigerator. Some fresh
fruits and vegetables, however, will store quite well out of the refrigerator as long as they are stored in a
cool place.

Refrigeration can substantially reduce the rate at which food will deteriorate. Low temperatures slow
down the growth of microorganisms and the rate of chemical changes in food. These are two of the
main causes of food spoilage. Different parts of your refrigerator will operate at different temperatures.
In older style refrigerators the upper shelves will often be slightly colder than the lower shelves.

Transporting Perishable Goods

Transporting perishables has different requirements in terms of demand, load integrity, and transport
integrity, paired with the specific equipment of a refrigerated unit and the energy necessary to run it
make transportation costs for cold chain products much higher than standard goods so the risk is much
higher for the booking agent.

On the flip side, a skilled agent can create a niche market if they build the skills necessary to take care of
these types of loads. The continual rise in living standards and economic specialization will drive the
growing demand for perishable good logistics and those who build the skills to consistently perform will
be linchpins for both those needing to ship perishables, as well as those receiving them.

Specification of reefer container

The diagram above shows the specification of reefer container. (extracted from atandsonline.com, 2017)

Cold Chain Equipment

The following types of cold chain equipment for transportation vehicles were created to keep perishable
products at the ideal temperature:

– Isothermal equipment has isolating walls, doors, ceiling, and floor, which limits the exchange of heat
between the exterior and the interior of the van.

– Refrigerated equipment has a non-mechanical cold source that can reduce the interior temperature
and maintain it for an average exterior temperature of 30ºC to -20ºC.

– Freezer has a cold production mechanism to reduce the interior temperature of the empty space and
maintain it at a consistent temperature between -12ºC and -20ºC.

Transportation of Perishable Goods by Land

Trucks transporting perishable goods have different cold systems, which may or may not be mechanized
(ice or dry ice is often used). Rail should have an isolating lining, as well as a special system for
refrigeration, loading, and unloading. Dry ice is often used to keep goods cold.

Transportation of Perishable Goods by Sea

Goods are transported in refrigerated ships that are fully equipped with systems to circulate air
properly. You can also ship in refrigerated containers (commonly known as reefers). Logistics operators
are in charge of consolidation or deconsolidation.

Before transporting perishable goods, a “temperature requirement sheet” is provided to indicate the
temperature at which the product must be kept in the refrigerated container.

Transportation of Perishable Goods by Air

This is the best option for transporting perishable goods. Each airport has a special area for handling
perishable goods where temperature can be controlled using refrigerated chambers and freezers. These
areas have customs inspection points that are guarded at all times by highly-qualified, specialized
personnel, which ensure that the goods are kept at the optimal temperature at all times.
Five Methods to Reduce Perishable Food Loss

1. Food loss can be reduced by ensuring that all the harvested produce reaches its intended end-use.
This means that food delivery mechanisms must also aim to counter the perishable nature of food, to
extend its saleable life cycle. Cold-chain is the mechanism that does this.

2. Cold-chain does not preserve endlessly. It applies technology to merely stretch the marketable time of
a perishable product, for a very finite duration. This or any time in hand should be fruitfully utilized and
not wasted in-situ storage, especially when dealing with high perishable fresh produce.

3. Cold-chain buys time by temporarily countering perishability. This allows produce owners more time
to reach buyers, to expand their market footprint to realise greater economic value. In turn, this
promotes gainful livelihood and justifies any efforts to increase production.

4. Saleable life extension is best utilised by moving to markets, reaching closer to the shelf and the
consumers who complete the cycle. Food lost in delivery chain is avoidable loss, and loss in the hands of
consumers is called waste.

5. Cold stores do not directly reduce food loss. They are only one piece in the cold-chain. All inventories
have a time limitation–even grain perishes if left in storage

Conclusion

It is important to note that quality supervision with better insight may or may not result in dynamic
logistics for the cold chain, such as assigning transportation based on the product’s predicted shelf life.
However, it is important either way because it helps to identify the weak links in the chain and can result
in structural changes, albeit static, which improve the quality and efficiency significantly. Hence, a
temperature-controlled container’s set point is an extremely poor approximation of the actual product
temperature. In fact, inconsistency in the quality of fresh produce from the same field can only be
explained by temperature variations that it might have encountered during transportation, which can
only be measured by a better quality monitoring system using higher resolution than the container
level..