LEAN Warehousing

What is Lean Warehousing?

A lean warehouse is a warehouse where the five lean thinking principles of Womack & Jones and a variety of Lean tools are applied. When we compare Lean Warehousing to other areas, we have to do with higher variability and lower predictability.

Get a day’s work done in a day

Most warehousing costs are fixed, while material throughput (picking, packing, receiving, put-a-way and shipping) is variable and this variability changes by season and even by the time of day or days of the week, depending on the type of business you are in. If the warehouse cannot consistently pick, pack and ship all orders, store all receipts, manage inventory and do these things efficiently and with a high level of accuracy, you will constantly be operating in “fire fighting” mode. Continuously operating in this mode leads to uncontrolled chaos and makes it virtually impossible to provide high and improving levels of customer service. It makes it impossible to get a day’s work done in a day.

The application of Lean Thinking to a warehouse, is completely different to manufacturing, service and administration, although the principles are the same. When training warehouse staff in lean Principles and Tools, one has to use warehousing language and case studies and applications.

The same as with Lean Manufacturing, there is no end to the process of reducing effort, time, space, cost, and mistakes. Continuous improvement is a must in warehouse activities.

Lean Transformation

Converting your operation to a Lean warehouse environment is not just another project or program. It is a different way of doing business. The most important difference between Lean Warehousing, and the vast amount of ‘good practices’ , warehouse optimisation, and technologies ( WMS – Warehouse Management Systems Software, Bar Coding etc ) is that Lean engages all staff, from the bottom up, in a continuous improvement process. This can be a challenging and involve major culture change for management and supervision who are used to solving all problems, and then ‘telling’ staff what to do.

It is based on the GEMBA principle. The GEMBA principle is that there are 3 square metres around every staff member ( associate ), who knows more about what is happening in that area , than anyone else. If you make a change in that area , without consulting that person, one of 2 things can happen:

a. You may not know all the issues that happen there, and the change will not work
b. The idea may be brilliant, and you convince the person logically to change the process, but he/she is not connected EMOTIONALLY – therefore they will only adopt the new process for a time, or only while they are being monitored

In order to effect a change for the better, the associate must be consulted. However, he/she may not be able to solve the problem on their own, therefore in lean principles, the managers / supervisors work together with the associates to develop ongoing solutions, using Lean Tools.

The most common Lean tools used are 5S ( Workplace Organisation ), Kaizen ( 7 wastes ) Line Balancing, Visual Management, Error Proofing, Value Stream Mapping

We do not speak about Lean Implementation, but Lean Transformation. An organisation is TRANSFORMED into a Learning organisation , which improves EVERY DAY. Every single day – the warehouse operates, just a little better than the day before.

A lean warehouse allows companies

A lean warehouse is a warehouse where the five lean thinking principles of Womack & Jones and a variety of Lean tools are applied When we compare Lean Warehousing to other areas, we have to do with higher variability and lower predictability.

A lean warehouse allows companies

  • To serve customers faster
  • With less space
  • Less inventory
  • And with more accuracy.
  • Address process issues, e.g Customer Returns Processes, Goods Inwards processes, not always addressed by conventional warehouse best practice tools, but well addressed by lean value stream mapping

Why Lean Warehousing – Case Studies and examples


APPLICATION Goods Inwards – Company that suppliers flower arrangements to supermarkets and garages
ISSUES REDUCE the TIME for booking in the goods – need to get to cool room ASAP to prolong shelf lifeReduce Waste of WAITINGREDUCE DEFECTS $15,000 per Month – identify horticultural issues quicker and report to vendorImprove LAYOUT and ID of items in store – Reduce Waste of SEARCHING (PROCESS)
TOOLS USED Kaizen Blitz– 40 improvement suggestions
RESULTS 76% Reduction in Lead Time to Receive34% Increase in Productivity67% Reduction in DefectsSavings of A$ 24, 500 per month
Lean Warehousing Lighting Supplier managed to save space in their store by re-layout and implementation of a custom designed stillages. ALL the stores staff understood that each square meter of floor space costs $120 per year – and the company has managed to lease out the spare space.This was effected by a team based improvement project – with a weekly 1 hour meeting to review progress & actions, resolve issues and remove roadblocks
Lean Warehouse


– Picking and packaging not always complete when courier arrives at a fixed time in the morning to deliver urgent deliveries


First analyze the number of types of picks, and standard time for picks , and time available till courier arrives

Daily meeting to calculate the number of staff required to do the work for those few hours –

No of People Required = ( No of Picks Required x Cycle Time for that Pick ) / Available time till courier comes = 2.8 – need three pickers

If three pickers not available, re-schedule from other activities, or get supervisor, or cross trained staff from finance

Lean Warehouse - Forklift Spares

Forklift Spares Warehouse

Cables previously had to be removed by Forklift from Pallets stored at a variety of levels in different aisles

All cables removed from pallets – placed in a single area – cutter at hand

Lean Warehousing - Forklift Spares Bumper Bars previously stored randomly and inefficiently. Spare Space between racks used to store Bumper BarsNormally not stored together – usually only accessible using forklift to retrieve from pallet
Lean Warehousing - Picking

Metal Products Distributor

Colour Coding used to prevent Missed Picks, Shipping Errors, Picking Errors etc

Lean Warehousing - Distribution

Distribution Centre

Picking Containers / bins have a double sided indicator card – one side Green (Pick O.K ) the other side Red ( Pick Part missing )

If a part in the picking list not available – picker turns the card around to indicate a problem

Prevents Bins with missing parts sent to customer by mistake – tagged red to prevent errors

For additional information on Lean Warehousing please call 61 (02) 9683 6200 or email admin@performancedrivers.com.au.


Performance Drivers Consortium nurtures world class capability and business performance. Meetings focus on the deployment of new and relevant operational performance improvement tools such as Lean Enterprise.

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