By Poul Breil-Hansen
Lean is all about creating a culture geared towards making things smarter and continuously seeking small improvements to improvements already made. In essence, lean is about eliminating waste from business activities. Ideally, all goods should be moving non-stop within the value chain and not remain static. By definition, stock is an unwanted child in the world of lean. One of the seven deadly sins in the Toyota Production System (TPS) is over-production or production to stock. However, the companies that can come up with a sensible business model without involving a warehouse are few and far between. Therefore, the lean exercise is all about ensuring the flow of goods through the warehouse is as quick as possible, that the customer can always get hold of the right product, in the right amount at the right time and that the company uses as few resources on warehouse management as possible. This entails extremely high quality because errors cost companies dearly, in terms of lost customer satisfaction, capital binding and internal resources used to put the error right.
WMS provides transparency
"That is exactly the job a WMS performs. A WMS has to control the flow of goods into, through and out of the warehouse so that it runs at the right speed, in the right order and with the utmost precision and is underpinned by the correct level of staffing. It has to ensure extreme precision when it comes to placing stock, picking and despatching and provide the warehouse management with an overview and transparency in real-time. A WMS is an automation of countless processes which were previously performed on paper and entails a host of error sources, such as human reading and writing mistakes," Product Director Mikael Holmqvist from Consafe Logistics explains, adding:
"A WMS creates excellent conditions for introducing in the warehouse. It provides data online and on time, it makes sure there are fewer picking errors, greater precision and provides a better basis for planning".
Remember the interfaces
However, Mikael Holmqvist also points out that a WMS can be a double-edged sword: "If a WMS does not also involve relations with customers, haulage contractors and suppliers, there will be sub-optimisation and it will not underpin a lean supply chain. A WMS has to be considered from a holistic perspective whereby it has to be integrated with the warehouse's external cooperation partners so that warehouse activities take account of consequences and conditions both upstream and downstream in the supply chain".
Processes for technology
Mikael Holmqvist believes that the most fruitful order of doing things is first of all to design and optimise the business processes and then adapt the IT tool to the WMS so that it matches the processes. When adapting the IT tool, it is crucial that you bear in mind that it is not just about improving picking times and quality. It is also, for example, about improving delivery times and reducing capital binding.
Too much or too little stock
The warehousing of components and goods costs money. So does handling and internal transportation. In a perfect lean world, supplies should flow directly into Production while finished products should flow directly from Production to the customer. It is only in rare instances that this kind of just-in-time production is feasible and, therefore, most companies need to constantly optimise the flow of goods and information so that waste is kept to a minimum. It could, for example, be advantageous to place goods which sell quickly close to the warehouse despatch area so that they require as little internal transportation as possible. Modern WMS include analysis tools that are able to support this kind of optimisation.
A WMS can also help a company identify cases where there is too much or too little stock of specific stock keeping units. If a company stocks hundreds of a particular component but the WMS shows that only ten of such components are being picked every week, it would make sense to reduce stock levels of that component. Conversely, a WMS can help identify stock keeping units for which customers most frequently experiences back orders.
Supports small consignments and continuous flow
An important element in lean is the quest to continuously produce items in small series and consignments and even, now and again, one-off items. In a lean world, more frequent deliveries involving smaller consignments are better than small numbers of deliveries involving large consignments because it makes for a more stable flow and, consequently, less waste in the supply chain. "A modern WMS allows for the handling of small consignments without having to sacrifice efficiency in the various operational units. Or, to put it another way: A WMS makes it possible to work efficiently with smaller consignments in a continuous flow," explains Mikael Holmqvist.
Get the maximum out of IT
"There is no doubt that implementation of a WMS will provide ample opportunity for optimising warehouse processes and thereby promote lean. The use of voice-controlled picking systems or perhaps RFID can eliminate even more waste from warehouse processes because they reduce errors and increase productivity," Mikael Holmqvist tells us.
As mentioned previously, lean is all about creating a culture that is geared towards making things smarter and continually seeking small improvements to improvements already made. Modern WMS are particularly strong when it comes to providing management with data, reports and information which can form the basis for ongoing improvements.
Double for half
Lean's roots lie in Toyota's TPS (Toyota Production System) and is popularly referred to "Double for half". In essence ,lean contains the following five phases: - Identification of value from the customer’s point of view
- Identification of the value stream
- Establishment of value streams
- The use of the Pull Principle: produce only what is needed
- Go for perfection
In this context, waste (Muda) is a crucial element. Waste can appear in many guises, such as: Over-production, waiting time, transportation, inefficient processes, unnecessary stocks, unnecessary movement, defects, untapped employee potentials, ineffective systems etc.
There are countless tools available for implementing lean. Some of the most prevalent include:
- Continuous Improvement
- Value Stream Mapping
- 5S
- Kaikaku – Radical Improvement
- Standards
- String Diagrams
- Value Engineering and Value Analysis
- Kaizen
- TPM
- OEE
- Root Cause Analysis
- Poke Yoke