DC Velocity - June 2013

strategicinsight CUTTING LOGISTICS COSTS

order to meet demand), APLL determined that the warehouse could handle the same amount of pallets in the same time with less labor. After changing the timing and flow, the facility now has one team for two dock doors; they load one trailer while the auditor checks the pallets for the other. While it isn’t possible to completely eliminate waiting time, those changes did cut out the equivalent of some 60 hours of waiting time each week, and the two “excess” workers were reassigned to order picking, Jacobs says.

One of the most basic lean tools is the “spaghetti chart,” which maps out the path a product takes during a particular process and visually shows the motion required. That can help warehouse operators identify overly complex processes, enabling them to reduce labor costs by addressing wastes like overprocessing and unnecessary transportation.

This type of analysis is especially helpful when there are numerous handoffs in a process. Menlo’s Wilusz tells of one operation that shipped via parcel carrier. Order pickers would gather items and drop them off at a sorting station. Someone there would sort and consolidate the orders, and someone else would pack them. Another person would run the packages through the parcel shipping meter and stage them for shipping. As a result, inventory would build up between each handoff.

An analysis conducted by the warehouse associates showed that eliminating those handoffs and creating a continuous flow would save labor and time. Now, each worker follows the packages through every stage—picking, packing, running the packages across the meter, and staging them for shipping. That eliminated waiting time, and minor changes to the shipping area layout helped to prevent congestion. The end result, Wilusz says, was a reduction in labor of 25 percent and a per-order leadtime that’s 50 percent shorter on average.

way. “By doing that, we are leveling the flow, so people can work at a consistent pace and there’s less need for overtime. They are not overburdened, but they’re not waiting either,” he explains. As a result, the facility is seeing labor savings of as much as 30 percent, Martichenko reports.

In another example,
lean analysis tools helped
an APLL customer cut
labor and waiting time on
a loading dock. The cus-
tomer had two teams
picking orders, placing
them on pallets, and then loading
them into trailers at adjacent doors
after each pallet was audited for
accuracy. On paper, dedicating
teams to a dock door might look
efficient, but both teams had a lot
of downtime waiting for orders to
be picked and for the auditor to
complete the reviews, Jacobs
recalls. Through line balancing
(leveling the workload so that the
timing and volume were consis-
tent) and analyzing “takt time” (the
rate at which work must be done in