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Lean warehousing – From complexity to simplicity

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As you study your warehousing operations, you should be able to identify every activity that absorb resources without creating additional value. The question that you all should ask to yourselves is how much more profitable could the warehouse be if we eliminated the errors or waste from the processes?

Poor utilization of space is a kind of waste. Space is money and it is paid for every month. If extra space is acquired when the existing warehouses are not utilized effectively, the waste is obvious.


Although staging of product at the shipping and receiving docks is accepted as a necessity today, could it be eliminated? Since warehousing is nothing more than the management of space and time, reducing waste starts with identifying the poor use of both.

Lean warehousing is the elimination of wasted space and wasted time with a systematic approach. It includes,

  • Improved flow of material
  • Better utilization of available cubic space
  • Creation of perfect orders.

A warehouse adds value of time, place and quantity that is not available from the manufacturer or supplier. Most warehouses receive large, infrequent loads and deliver smaller loads more frequently.


Focus on FLOW

Material flow (MF) is the description of the transportation of raw materials, pre-fabricates, parts, components, integrated objects and finally products as a flow of entities.

Benefits after optimization of material flow

  • Purchasing cost will decrease
  • Quality of product will increase
  • Manufacturing waste will decrease
  • Production will increase
  • Product cost will decrease
  • Customer satisfaction will increase

“10 Golden Rules of Storage”

5 Freedoms

  • Search free
  • Count free
  • Air free
  • Bend free
  • Climb free

2 Hygiene Factors

  • Well lighted
  • Well Ventilated

3 Good Practices

  • First in First Out
  • Point of Use storage
  • Heavy & tall Items on bottom of shelves

Opportunities for improvement in warehouse


  • Order booking Process
  • Order receipt & entry process
  • Order picking process
  • Truck loading process


  • Goods receipt process

Stock Management

  • Defective Goods Management Process
  • Returned Goods management process
  • Non Moving & Slow Moving Management Process
  • Excessive Transportation, Motion & searching of Goods in Storage
  • Storage Methods are Floor Based
  • Stock Outs & Loss of Sales

Warehouse is a part of supply chain

If we improve warehouse stand alone

  1. We will get substantial, but sub optimal benefits
  2. Sustainability will be tough

Lean thinking will require a conversion from top-down leadership to bottom-up initiatives.




Author: Kaizen Institute - India!

Kaizen Institute – India is part of the Global Kaizen Institute operations. Kaizen Institute was established by Sensei Masaaki Imai, the GURU of Kaizen. He wrote the 1st book 28 yrs ago and that is when it all started . We operate in 30+ countries today and have over 400+ coaches helping more then 600 organizations Learn, Apply, Sustain – Kaizen/ Operational Excellence. In India we have two physical offices – Pune & Ahmedabad and 27 coaches in all.

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