Lean Warehousing Principles: What Are They and How to Implement Them

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Lean warehousing principles make it possible for businesses to maximize their productivity while minimizing the use of resources.

For a logistics company, a warehouse is indispensable. Warehouses play a major role when it comes to the whole supply chain, which is dynamic and involves a lot of processes. Aside from the stocking of inventory, warehouses perform other key functions such as sorting, handling, distributing, and processing, among many others.

How then can a company maximize its warehouse while minimizing resources? This is where lean warehousing principles come in. These principles are more like a guide for companies to be able to maximize the productivity of their warehouses. 

Some lean warehousing principles are straightforward and involve following a set of instructions. Other principles use visual cues which allow warehouse personnel to have an overview of the processes within the warehouse. These cues often give a representation of the movement of goods within the warehouse, which is quite similar to what is happening in a supply. chain

We look at some of the popular lean warehousing principles that are currently being used by companies across the globe, including the; i) ‘5S’ principles, ii) value stream mapping; and iii) the ‘Kanban’ system.

The ‘5S’ lean warehousing principle

The “5S” was pioneered by a Japanese company and these principles aim to increase efficiency in the warehouse. The “5S” represents the Japanese words “seiri,” “seiton,” “seiso, “seiketsu,” and “shitsuke”. The English equivalent of these words are sort, streamline, shine, standardize, and sustain.

How do can companies implement the ‘5S?’ Warehouse personnel simply have to keep in mind the ‘5S’ words. 

“Sort” involves ensuring that unneeded items lying around the warehouse are removed and packed away, thus increasing usable space.

“Streamline” or “set in order” means personnel should be able to organize their workspaces, organize tools so that they can be within arm’s reach of workers. Organizing the workspace also minimizes workers’ movements. 

“Shine” means employees should clean the work area after using the said area. This also means removing clutter and debris.

“Standardize” means warehouse managers should be able to document best practices and share them with workers.

Lastly, “sustain” means each of the previous steps should be religiously followed on a daily basis.

Value stream mapping (VSM)

Value stream mapping (VSM) is another lean warehousing principle that is often used by warehouse managers. VSM is a process that managers use to understand the workflow in the warehouse, the interactions between processes in the warehouse, and the potential gaps or concerns in these processes.

VSM allows a manager to have a visual map of the workflow. The manager can then identify which items are being stored inefficiently and which items are being handled too often. Visual mapping also allows the manager to improve the layout of the warehouse depending on the items.

For example, fast-moving items should be strategically placed so that they are easy to access or reach, while slow-moving or non-priority items can be placed in certain areas.

Aside from the movement of goods and products, VSM allows managers to have a strategic view of the flow of information in the warehouse, an example of which are the steps, that a worker needs to accomplish a specific task. A manager can then use the information to create a diagram to illustrate the workflow and hopefully improve the supply chain and logistics within the warehouse.

The ‘Kanban’ system

The ‘Kanban’ or ‘pull’ system focuses on inventory management in the warehouse. ‘Pull” means this system “pulls” supplies or items from the warehouse based on what items are in demand or what items have been ordered. 

The ‘Kanban’ system aims to make the supply chain more efficient by creating an orderly flow of items. This system is unique because it uses cue cards to manage or control the movement of items. For instance, ‘kanban’ cards are exchanged between warehouse departments so that the movement of items is precise. Ultimately, ‘kanban’ aims to reduce the guesswork when it comes to determining how many items are there in the inventory, how many items have been ordered, and how many items are left in stock. 

‘Kanban’ also minimizes bottlenecks, because ideally, new work or process cannot be started until the ongoing work or process is completed. Basically, ‘kanban’ reduces traffic in a warehouse operation, which is similar to an assembly line.

For example, if somebody in the labeling station sees that the items being processed do not match, the labeling station will not receive additional items until the issue is resolved. In this scenario, the worker can identify the issue and prevent it in the future.

What is right for you?

In terms of logistics and the supply chain, lean warehousing is not simply cutting costs by reducing the number of workers or using small spaces, but it is about making operations more efficient. 

An efficient warehousing operation has become a necessity, not just for logistics firms, but for a wide range of businesses across the globe, including retail and e-commerce firms.

We can further simplify lean warehousing as the effective use of warehouse space and personnel. Lean warehousing aims to i) reduce the complexities of a warehouse operation and logistics; ii) identify bottlenecks; and iii) reduce downtimes in the supply chain, among others.


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