Lean Thinking for Warehousing and Distribution: How to Know Your Business

The vast majority of warehouse or distribution center managers have nowhere near the level of detail about the business that’s needed for a lean transformation, according to David Graham, who for 20-plus years has been crawling through inadequate and bogus operational performance reports as part of his job helping warehouses and distribution centers become lean.

A big reason for the scarcity of detailed data, Graham explains, is that in traditionally managed operations, deep knowledge of the business isn’t needed to manage or solve problems. When glitches arise, the first action often is to add waste to the process – more supplies, more equipment, more storage space – in order to cope with the problem.

As a result, lean transformations in warehouses and distribution centers typically get off to slow starts as sufficient and dependable data is gathered about demand, cost, productivity, customer satisfaction, and storage. 

So, exactly what data and how much of it do you need? Read David’s new and original article in the Knowledge Center to start or accelerate your transition to lean distribution. In “Think You Know Your Warehouse or Distribution Center? Think Again,” Graham shares years of experience to explain the key data you need for a successful transition, and to provide some results and anecdotes from the implementation trenches.

Here’s an excerpt:

“Because what I call “Knowing Your Business” (KYB) requires a greater breadth and depth of information than most operations tracked in the past, there are no processes or infrastructure in place to get the information. It’s like building a road while driving on it. Data sampling, ad hoc queries coupled with more manual data collection and analysis, provides a temporary fix. However in the long run the infrastructure needs to be built to gather the information you need to truly know your business.

The primary objectives of “Knowing Your Business” are:

• Understand the current state; cost, quality, and delivery baselines
• Set improvement targets
• Redesign processes
• Identify quick wins and improvement opportunities.

For demand data, the information you need to know about the business typically includes three primary categories: outbound operations, inbound operations and storage…” Read the full article.