MANG THE CASE OR LEAN WAREHOUSE MANAGEMENT

LEAN WAREHOUSE MANAGEMENT

MAKING THE CASE FOR

CONTENT CREATIONPEERLESS

By identifying and eliminating waste in the warehousing and distribution environment, organizations can cut costs and

improve their bottom lines in any business conditions.

2 • TOYOTA: Lean Warehouse Management • toyotaforklift.com

LL WAREHOUSE MANAGERS like to think that they run a tight ship, where wasted processes are minimized, employee

productivity is high, and throughput is on target (or better). But not all warehouse and DC environments can truly make these claims—or at least not on a predictable, daily basis. Continually increasing customer demands and highly competitive markets have set the bar high, as businesses find it more difficult to drive efficiencies that will help them satisfy customers. Under these conditions, fulfillment centers can be thrown into a frenzy as they rush to keep up with demand. Warehouse, DC, and 3PL managers that have found themselves running in place need systems that help them reduce waste, maximize their physical assets, and fully leverage their people power. Some are finding the answer in lean management techniques, a concept that originated on Toyota’s factory floors and then quickly resonated across many different facets of the business world. Today, Toyota Lean Management (TLM) or “lean processes”” focuses on helping organizations optimize processes to eliminate waste or “muda.”

MAKING THE CASELEAN WAREHOUSE MANAGEMENT

Would Your Warehouse Processes Make the Cut?

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Authorized Toyota forklift dealers offer automation products in partnership with Bastian Solutions, a Toyota Advanced Logistics company.

TOYOTA: Lean Warehouse Management • toyotaforklift.com • 3

Bruin, “and helps them speed up their operations and keep up with customer demands.” As warehouses and DCs adopt more automated equip-ment and software, Bruin says lean serves as a litmus test for whether those investments are actually necessary (or not).

Companies should assess and fully understand their material flow, including analyzing all appli-cable data, in order to determine the right solution for their specific needs. Once those operations have established a clear under-standing of their existing process, they can make an informed decision about whether to opti-mize their manual processes or automate where necessary. “You don’t want to automate a poor process,” Bruin adds. In this Making the Case, we’ll take a closer look at the basic tenets of lean warehouse management, show how it applies at the typical fulfillment center, and explain the return on investment associated with lean practices being put into action on the warehouse floor.

warehousing, distribution, and fulfillment processes over the years. Without even realizing it, companies are repeating steps that—if eradicated or replaced with something better—could

substantially improve efficiencies, productivity, and throughput. These “wins” are especially critical in today’s warehousing environment, where changing customer demands, the evolution of digital business, and the growth of e-commerce are putting unique pressures on fulfillment opera-tions. “Regardless of what’s going on around them at any given point, companies can always control their profits if they can control their costs,” Redelman points out. “That means they can improve profitability by identifying and elim-inating waste.”

Scaling Up with Ease With most warehouses, DCs, and 3PLs handling higher volumes of product right now, Bret Bruin, TMH’s director of aftermarket sales and operations, says that lean helps to facilitate those higher velocities without the need for additional equipment or labor. In fact, Bruin estimates that some level of waste exists in every process that is performed in a warehouse facility. “Every piece of waste we help remove adds profits for DC or warehouse owners,” says

The Lean TreatmentFrom reducing the number of forklifts being driven around “empty” to clearing the congestion from inbound and outbound shipping areas to eliminating obsolete stock

that’s just taking up space, lean has proven its worth in the modern warehouse and DC. In fact, Scott Redelman, Toyota lean manager, says just about any process that takes place in the fulfillment arena could probably use the lean treatment. “If there’s a process,” says Redelman, “then there’s a process that can be improved through the identification and elimination of waste.” Using that foundational philosophy, Toyota Material Handling (TMH) serves as a total solutions provider that not only offers world-class material handling systems, but also solves its customers’ most pressing pain points.

In many situations, these pain points are caused by the excessive waste that has infiltrated businesses’

Would Your Warehouse Processes Make the Cut?

— Scott Redelman, Toyota lean manager


“If there’s a process, then there’s a process that can be improved through the

identification and elimination of waste.”

“Regardless of what’s going on around them

at any given point, companies can always

control their profits if they can control their costs.”


“Every piece of waste we help remove adds

profits for DC or warehouse owners

and helps them speed up their operations and keep up with

customer demands.”

— Bret Bruin, director of aftermarket sales and operations, TMH


ONTINUALLY ASKED TO DO MORE WITH LESS, today’s ware-house and logistics managers need help reducing resource consumption without hurting

productivity. Achieving this goal is difficult enough during “normal” business scenarios, but it’s especially challenging within the context of high consumer demand.

Managing in a changing and challenging business environment requires systems that not only keep a facility’s wheels turning, but that also increase efficiency and productivity. That’s where lean comes into the picture.

What is Lean Warehouse Management?

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Authorized Toyota forklift dealers offer automation products in partnership with Bastian Solutions, a Toyota Advanced Logistics company.



THE PRINCIPLES OF LEAN

Coined and made popular by Toyota, lean is based on five principles that all start with the letter “S.” The Toyota 5S approach serves as the foundation for lean management,

because it creates the standard for measuring improvement. They are:

While shine does imply cleaning and tidying items, it also calls for fixing problems. As you are cleaning a space, you may notice the inconsistency in the order of items or the lack of organization. In this step, make those changes or implement countermeasures as you go.

This step is about creating safe, efficient, and successful practices to efficiently complete a process or task that can be duplicated to optimize the performance of the process or task. Standardization pro-motes safety and allows the process to be easily shared among team members. Completing a process or task in the same safe and efficient way each time allows you to identify and address systematic breakdowns and to replicate continuous success in performing the task or process.

Sustaining is an important step and potentially the most difficult part of the process. The process must be consistent with the rules developed throughout the 5S. Along the same lines, sustaining also means a constant drive for improvement. Just because a process or rule is in place doesn’t mean that there can’t be a conversation about an improvement or evolution among employees. Keeping up with the times and sustaining a space means that the 5S process never stops.

SEISO – SHINE

SEIKETSU – STANDARDIZE

SHITSUKE – SUSTAIN

This quite literally means, “creating a system for a particular space.” Make sure there is a place for everything and everything stays in its place. Labeling spaces with items and number of items helps to systematize your storage and also helps in a later stage (standardize). During Seiton, it’s also vital to think of the flow of a workspace. What items get used the most and at what time? Who enters and exits this space? Recalling and analyzing purpose is important when systematizing.

SEITON – SYSTEMATIZE

This means going through items and deciding what is necessary and what is not to reduce clutter. The reduction of clutter leads to safer more secure spaces. Throwing away unnecessary items may be difficult, but it’s important to maximize space and efficiency.

SEIRI – SORT




“Lean isn’t just about process; it’s also about corporate culture and developing people…In fact, we have a saying here that ‘making things is about making people,’ and that applies when you bring lean principles into the fulfillment environment.”

The Eye Test Rooted in the Japanese term Genchi Genbutsu (which trans-lates into “go and see”), lean incorporates observation, data, and scorecards to ferret out and address areas of waste in a fulfill-ment operation. “The best way to observe and understand is to use the ‘eye test,’” says Scott Redelman, Toyota lean manager. “Our lean consultants can go into any ware-house, DC, or 3PL operation and pinpoint the areas of waste, determine the key operational pain points, and then come up with ways to help improve product flow and other pro-cesses.” Recently, for example, Redelman’s team worked with a beverage producer/distributor whose biggest pain point was low throughput at its distribution site. “We spent time with them and came up with a whole list of problems that needed solving,” says Redelman. “Some of it involved equipment solutions, but we also helped revamp the operation’s layout, flow, picking sequence, and safety processes.” Along the way, the lean team uncovered a perpetual overstock problem that, once remedied, led to profitability improvements for the beverage maker. Next, it

examined the customer’s man-agement hierarchy and discov-ered that it was too “top heavy” to be effective. “Too many people were report-ing to the shop foreman,” Redel-man explains. To solve this issue, TMH recommended adding a layer of team leaders in between the DC’s employees and that foreman. This would allow the company to maintain the same size workforce, but would spread decision-making across a broader swath of people.

Upon adopting TMH’s lean principles, the beverage com-pany began to see immediate efficiency, productivity, and profitability improvements. “This is just one of many companies that’s seeing the rewards of applying lean to its distribution operations,” says Redelman.

Making Things is About Making PeopleLean goes beyond physical processes and also incorporates the human side of the fulfillment operations. In fact, Bret Bruin, TMH’s director of aftermarket sales

and operations, sees lean as a top employee development tool. “Lean isn’t just about process; it’s also about corporate culture and developing people,” says Bruin. “In fact, we have a saying here that ‘making things is about making people,’ and that applies when you bring lean principles into the fulfillment environment.” Lean also helps improve employee engagement and makes workers want to come to work ev-ery day—knowing that their work-

places are clean, free of waste, and uncluttered. A waste free environment helps facilitate an ideal of Taiichi Ohno, founder of the Toyota Pro-

duction System, who said, “People don’t go to Toyota to ‘work,’ they go there to ‘think.’” Facilitating a waste-free, thinking environment helps to improve productivity at the individual employee, depart-mental, and organizational level. Creating that working environ-ment requires leadership buy-in and a long-term commitment to complete cultural change. “This isn’t just some new program that’s being introduced,” says Bruin, “this is a process that envelops and impacts the entire distribution organization.”


S HE SURVEYS THE WAREHOUSING AND DISTRIBUTION SECTOR, Scott Carlin sees companies trying to do more with less, offset their labor woes (i.e., shortages of

workers, social distancing requirements, etc.), and compete with the likes of Amazon and other huge e-tailers. Combined, these challenges—plus myriad other disruptors—are pushing more fulfillment centers and 3PLs to adopt lean warehousing practices.


Lean Warehouse Management in Action

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Warehouses and distribution centers are overwhelmed right now,” says Carlin, VP of sales and Toyota Lean Management at Shoppa’s Material Handling, one of more than 60 Toyota forklift dealers throughout North America. Through a combination of material handling solutions, automation, and boots-on-the-ground observation, Shoppa’s helps these companies optimize their operations, save money, and gain efficiencies using lean management practices. “We take the lessons learned from Toyota and implement them at the individual company level,” says Carlin. “Much like Toyota did when it first started introducing lean at U.S. companies, we’re doing the same thing with our own customers.”

Step By Step In most cases, lean warehouse management starts with a Toyota Lean Management (TLM) site or “application” survey. This gives consul-tants at Shoppa’s a firsthand look at the com-pany’s current setup and thoroughly evaluate that operation. As part of that process, they measure all of the company’s methodologies, applications, materials, and throughput. They also measure the facility to ensure that any new products will fit well (i.e., by aisle width, product size, product weight, total facility size), note the number of shifts worked, and the total number of SKUs managed.



“After that thorough evalua-tion, we take our TLM mindset and integrate much-improved processes into that customer’s application,” says Carlin, who recently worked on a TLM project for a large distribution facility that was dealing with major efficiency and through-put issues. After completing a site survey, Shoppa’s quickly realized that the firm’s forklifts didn’t match its needs. “The company was using multiple batteries per truck and allocating a lot of time to mov-ing those batteries from truck to truck,” says Carlin. “In an industry where time is literally money, this approach was not only costly, it also introduced safety concerns.”

Power Study Turns Up ProblemsTo help resolve its customer’s issues, Shoppa’s offered a complimentary power study. Through that exercise, it learned that the company was using too many AMP hours for standard charging, and that it would benefit greatly from an oppor-tunity charge setup. That would mean using just one battery per forklift, versus two per incorrect

truck. “When we implemented opportunity charging capabil-ities at that site,” says Carlin, “efficiencies increased substan-tially because drivers weren’t stopping constantly to change batteries anymore.” Shoppa’s also did a TLM study for the same customer and, through that process, found even more inefficiencies

and waste (aka, “muda”). For example, there was a lot of forklift cross traffic, extra moves, and additional steps required to get items from point A to point B because it was storing inventory in the wrong locations within the warehouse. These additional moves led to associates sitting around, waiting for product. “We made a spaghetti diagram

showing all of the wasted motion of an operator,” says Carlin. “Then we came up with suggestions for reducing that waste, and showed them how to use 5S to make even more improvements.” From there, Shoppa’s went about educating the company on the benefits of 5S, continuous improvement, visual management, and Kaizen (among other lean concepts). Using visual boards, two meetings per day (one in the morning and one in the afternoon), and the introduction of problem-solving method-ologies, Shoppa’s helped the company improve its quality, increase its efficiencies, and enhance its throughput. Thanks to these positive results, the company is now enlisting help from Shoppa’s across addition-al locations. Shoppa’s also wants to introduce the lean concepts and strategies to its suppliers, many of which are interested in emulating their customer’s lean success. “This project got pretty big and fairly quickly,” says Carlin, “and it all started with the company’s openness to share ideas and to work with us to come up with solutions.”

“We take the lessons learned from Toyota

and implement them at the individual company level. Much like Toyota did when it first started introducing lean at U.S. companies, we’re doing

the same thing withour own customers.”

— Scott Carlin, VP of sales and Toyota Lean Management,

Shoppa’s Material Handling

Lean Warehouse Management



Lean Warehouse ManagementMAKING THE CASE FOR

When companies adopt lean practices in their warehouses and DCs, everyone wins.

FOR THE LOGISTICS MANAGER: Much like the warehouse manager in the example above, who didn’t realize how much time forklift drivers could be saving by not having to constantly swap out vehicle batteries, logistics managers typically see significant gains by adopting the simplest of lean practices.

Those benefits begin with the TLM survey, where a second set of eyes wanders over the processes in place and offers up viable, efficient alternatives. “When we are working with a company, our goal is to solve problems together,” says Scott Redelman, Toyota lean manager. “We get to know everyone on the warehouse or DC floor, sharing part of Toyota’s DNA with them and working to integrate lean prac-tices across the operation.” Through this process, Redelman and his team ferret out the pain points, pinpoint the problems, and then offer solutions that eliminate the problem and support continuous improvement across the orga-

nization. “To reach that goal, we have to get right out onto the floor with the logistics or warehouse manager,” says Redelman, “and take an inside look at what’s going on out there.” In return, Bret Bruin, director of aftermarket sales and operations for Toyota Material Handling, Inc. (TMH), says those managers get the opportunity to run high-performing organizations that never stop improving and learning. “Once they’ve been through the TLM process, managers are never going to be satisfied with ‘good enough,’” says Bruin. “They’ll continually push to perfect their processes and will never stop improving.”




“When we are working with a company, our goal is to solve problems together. We get to know everyone on the warehouse

or DC floor, sharing part of Toyota’s DNA with them and working to integrate lean practices across the operation.”

“CFOs have to work to protect their company’s margins, and that’s exactly what TLM helps them do. By removing waste from

their fulfillment and distribution systems, CFOs can improve margins from the time the order is received until it’s delivered to the end customer.

Every penny that’s eliminated goes back to the bottom line.”


FOR THE CFO: The market determines pricing, and that pricing is becoming more and more trans-parent every day. Concurrently, CFOs are running leaner and leaner operations and learning how to do more with less in light of outside factors. For them, the opportunity to “lean out” a warehouse, DC, or 3PL provides the backdrop for substantial cost and time savings.

“CFOs have to work to protect their company’s margins, and that’s exactly what TLM helps them do,” says Bruin. “By removing waste from their ful-fillment and distribution systems, CFOs can improve margins from the time the order is received until it’s delivered to the end customer. Every penny that’s eliminated goes back to the bottom line.” Redelman says CFOs should also know that Toyota

thinks well beyond just selling forklifts when it works on TLM engagements, knowing that companies have multifaceted fulfillment problems that can’t be solved by throwing more equipment at the issues. “It’s about removing the roadblocks and barriers that these operations encounter daily that keep them from achieving their organizational goals and targets,” says Redelman. “That’s where true ROI shows up.”

FOR THE CEO OR COO: Focused on global decision-making and the day-to-day functioning of their organizations, these C-level executives have a lot on their plates, as they try to ramp up their warehous-ing and distribution operations to meet the needs of their customers.

For them, the ROI in lean warehouse man-agement comes in the form of a more productive, profitable operation that’s effectively eliminated wasteful steps and processes. Lean also helps instill a culture of continuous improvement, which means the work isn’t done when TLM’s consultants walk out the door. “We show them how to build a problem-solving

culture that’s focused on continually avoiding or eliminate waste,” says Redelman, “versus just going in and trying to solve all of their problems during a single engagement.” Over time, the company that “stays in the lane,” so to speak, and continues its lean journey will subsequently rack up greater and greater ROI. “The wins will literarily compound upon themselves,” says Redelman.


THE THREE PILLARS OF A LEAN WAREHOUSE

THE THREE PILLARS OF A LEAN WAREHOUSE

JIDOKA, WHICH CAN BE LOOSELY TRANSLATED AS “AUTOMATION WITH A HUMAN TOUCH.”

Jidoka means when a problem occurs, the equipment stops immediately to prevent defective products from being produced. Jidoka began with

the Type-G Toyoda Automatic Weaving Loom in 1924. The Type-G would stop as soon as it detected a broken thread, which prevented defective

products. Applying jidoka in a warehouse environment may include auto-mated processes for put-away, picking, and inventory control in an effort

to support productivity and control quality.

JUST-IN-TIME (JIT) MEANS EACH PROCESS PRODUCES ONLY WHAT IS NEEDED BY THE NEXT PROCESS IN A CONTINUOUS FLOW.

Material is delivered on-time, in real-time, and only the material needed for the current task are delivered. The goal of JIT inventory management

is to increase cash flow by reducing overhead expenses. Too much inventory reduces working capital and tends to hide problems. JIT also

reduces inventory costs as warehouses are not left with unwanted inven-tory if an order is canceled or not fulfilled or a defect is found.

KAIZEN, WHICH CAN BE TRANSLATED INTO “CHANGE FOR THE BETTER” OR CONTINUOUS IMPROVEMENT.

Practicing Kaizen, Toyota continually makes incremental improvements each day to processes and products. Toyota relies on the suggestions and ideas of the people in the processes, the true experts. No process

can ever be declared perfect, but it can always be improved.

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Using these basic, time-tested philosophies, TLM helps warehous-es, DCs, and 3PLs improve upon their processes and develop more

efficient, profitable fulfillment operations.


SK SCOTT CARLIN WHY EVERY DISTRIBUTION OPERATION SHOULD BE THINKING ABOUT LEAN right now and his answer comes pretty

quickly: “Why didn’t they do this yesterday is the bigger question,” says this VP of sales and Toyota Lean Management at TMH dealership Shoppa’s Material Handling.

warehousing approach from there, knowing that the bigger the focus on incremental and continuous improvements, the larger the rewards. “Sorting and systemizing open people’s eyes to how much waste they’re really dealing with; it becomes very evident,” says Bruin, who tells warehouse

and DC managers to start small by cleaning out the clutter in one section of the warehouse and then organizing what’s left. “Anyone can do it. It’s just rolling up your sleeves for a few days and getting your hands dirty as you eliminate the waste that’s been piling up over the years.”

when the employee parking lot is brimming with cars, it’s a clear sign that the operation is ripe for better efficiencies and automation. “Instead of throwing more people at the processes,” says Carlin, “you can bring in automation and get off the struggle bus of not having enough associates.”

According to Bret Bruin, director of aftermarket sales and operations for Toyota Material Handling, Inc. (TMH), companies can start seeing results by starting with the first two “S” steps in the process: Sort and Systematize. Then, they can expand their lean

Having seen firsthand the results and ROI produced by a commitment to lean warehousing, Carlin says any operation that’s not already thinking this way is missing out on major opportu-nities to improve, optimize, and prosper. “If you want to figure out the ‘why now?’ you’ve already fallen behind in those opportunities,” says Carlin, who adds that there’s no time like the present to make up for that time lost. For example, if your forklift fleet is continually breaking down, stop fixing the vehicles on the spot and instead look for the root cause of the problem. If the fleet is old, then it’s probably time to replace it. If the vehicles aren’t well made, then it’s time to switch manufac-turers. “Get the actual causation of the issue,” says Carlin. The same approach can be applied in the human resources realm, where high employee turn-over is a generally accepted prob-lem in warehouses and DCs. If HR is scrambling to fill positions even

Why Didn’t We Do This Yesterday?



“Sorting and systemizing open people’s eyes to how much waste they’re really dealing with; it

becomes very evident. Anyone can do it. It’s just rolling up your sleeves for a few days

and getting your hands dirty as you eliminate the waste that’s been piling up over the years.”

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Why Didn’t We Do This Yesterday?

TO FIND OUT MORE ABOUT WHAT TOYOTA CAN DO,

VISIT WWW.TOYOTAFORKLIFT.COM

CUSTOMER SUPPORT: 1-800-381-5879

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MANG THE CASE OR LEAN WAREHOUSE MANAGEMENT