When it comes to production and manufacturing efficiency, lean is king. A 2010 study showed that almost 70% of manufacturers utilize some type of lean product management. However, the lean movement has been slower to take root in the warehousing and logistics sector, especially in cold chain storage. While many warehousing facilities lag behind, lean process improvements provide an opportunity to gain competitive advantage.
Lean is a process of continuous reduction and elimination of waste that many organizations have implemented to streamline operations, reduce costs, improve quality, and ultimately make their production more efficient. Lean principles originated with Japanese manufacturing philosophy, specifically at Toyota. There are many process improvement frameworks that underpin lean production, but one that resonates particularly well with cold chain storage is Kaizen, or continuous improvement. As new technologies emerge, cold chain warehouses have an opportunity to save and improve on energy and labor like never before.
The first step toward Kaizen is recognizing where improvement is needed – and that’s where the Seven Deadly Wastes can help. With your cold chain storage in mind, work through the following 7 Deadly Wastes to see where you could be saving money and time in your cold warehouse.
- Overproduction: Producing more than is needed for immediate use. This waste is considered the most deadly because it contributes to the other six wastes. In cold chain storage, this typically takes the form of inaccurate demand forecasting which leads to too many replenishment orders. This can be improved by increasing the frequency of replenishment orders and utilizing inventory management software. Having finished items and materials highly visible by using a mobile racking system also helps with counting and managing demand visually.
- Waiting: Any delay between the end of one process and the start of the next activity. Examples of waiting in cold chain storage include the time between the arrival of a truck for a pick-up and the loading of the trailer or delay between when receiving orders and beginning to pick and pack them. Analyzing and optimizing employee scheduling around delivery and order times can help reduce waiting times. In addition, improving upon the other wastes can help employees utilize time more efficiently to move orders through faster.
- Transportation: Unnecessary movement of products and materials. This can take the form of extra steps in processes, longer distances between steps of processes, or locating fast-moving inventory at the back of a warehouse where it can’t be accessed easily. With the high cost of labor, this is an easy area to make the most of employees’ time. Try to put items that are often packed or packaged together in the same area so movement is minimized. Mobile shelving can help get items and packaging as close as possible – even in constricted areas – by compacting the aisles.
- Motion: Unnecessary movement of people, such as walking, reaching and stretching. When pallets are stacked too high, too deep, or in inconvenient locations, it wastes employee time and increases touches. By installing a heavy duty mobile racking system, you can avoid pulling out extra pallets to reach needed materials and locate more pallets in a smaller footprint to reduce travel times.
- Inventory: Any raw material, work-in-process, or finished goods that exceed what is required to meet customer needs just in time and to maintain process stability. In cold storage, this is very costly as many stored items can expire if there is an over-order. Consider implementing RFID or other tracking systems to help automate the count process. Utilize a storage system that allows for quick access to allow batch counts as time allows.
- Over-processing: Using more energy or activity than is needed to produce a product – or adding more value than the agreed standard. Eliminate any unnecessary paperwork, movement, or computer sign-ons when possible.
- Errors: Damaged goods, improperly picked orders or inaccurate counts can lead to returns, poor customer service, and wasted time needed to correct orders. This can significantly increase labor costs and wasted product. Getting pallets off of the ground and making them highly accessible using mobile racking can help avoid damage caused by excessive movement of the pallets.
Smarter heavy duty mobile racking can help your cold chain storage avoid the 7 Deadly Wastes by improving use of space, creating a streamlined picking process, and utilizing employee time more efficiently.