Lean and green initiatives in today’s DCs and warehouses not only help optimize operations, but they also contribute significantly to the bottom line. When all is said and done, the best-optimized business operations are inherently lean and green. WT100 has uncovered some top initiatives that companies are adopting as they continue optimizing their operations. Here’s what the experts have to say about lean opportunities that exist throughout warehouse and DC activities.

Jorge Alvarez notes that the discussion of going lean and green should focus on warehouses operating racks and forklifts versus pick towers and conveyor systems, as these environments are where most waste exists. The first step in eliminating waste and affecting a lean approach to operations is to assess the effectiveness of inventory control processes, advises Alvarez, principal at Danville, California-based Consultleague, a consortium of independent consultants.

“This is fundamental to every other process you do in your DC. As lean aims to eliminate waste, a trip to a location that fails to find the right inventory (failed trip) will in turn trigger several other trips to correct it. Good inventory management drives failed trips to zero. This affects both lean and green because an operator is not wasting time doing a false pick (failed trip) that doesn’t render a positive result. Secondly, there are no extra forklift footprints due to the corrections needed to cycle count and find and adjust inventory.”

The physical layout of the warehouse plays a large role in affecting efficiencies, while something as simple as making sure products are stored in optimal locations will streamline your operation. “When an operator goes to pick, he should also be putting away other products in a round trip rather than having to do a lot of single trips back and forth,” Alvarez suggests. Many WMS solutions can pair a pick with a put away, which effectively moves companies into the lean and green space.

Keeping it clean (and green)

Furthermore, a clean and tidy warehouse environment enhances the workflow, notes Victor Ippolito, vice president of IT for Flex Solutions in Ontario, California. “We discovered this to be a significant cost efficiency. Some people might think it’s not productive to have the floor swept clean or to have pallets stored neatly and squarely. But when an operator comes to pull product from a cantered pallet, he has to take time out of his workflow to first straighten the pallet before pulling the required product. These stops in productivity can slow down the process and can increase labor costs over time.”

Another area to consider greening up is your computer system, continues Ippolito. He says some warehouses accommodate their work for the computer system instead of having the computer system accommodate operators for the work needing to get processed. “For example, there are extra steps they have to go through in pulling an order because their operations are hamstrung by their computer system.” He cites an example of a company needing to apply several customer compliance shipping labels to each pick-and-pack order. “There might be four different labels that have to be applied to an order, all of which could be produced and applied during the packing stage,” he explains. But because of how the computer system is programmed, one label has to be produced before the order is pulled, another in the middle of the process, and the final two labels at the end of the process. “So they wind up fighting their computer system and have to spend precious labor time running back and forth to the computers, when actually the process can be streamlined down by some 40 percent per order just by modifying the computer system.”

When a warehouse can turn on a dime for its customers, it will win kudos and continued successful business opportunities from its customers. Flex Solutions was handling a product launch for one of its customers, only to discover there was a serious flaw in every one of the circuit boards used in each of the 15,000 products that had just arrived from a manufacturer in China. “There was no way we could return the products to China because there simply was not enough time as the launch date loomed,” reports Ippolito. “So we brought in certified solderers and set up lines right here in the warehouse where we reworked all 15,000 of the products. We had only a two-week time frame, but we were able to save the day for our customer, really coming through for them and allowing them to meet their launch date.” The company also had to build displays to contain the products so all retailers had to do was open the displays and put them on the floor.

Consolidation opportunities offer further cost-savings benefits, especially for warehouses utilizing higher levels of automation and technology, continues Alvarez. Consolidating products by geographic destination or by customer enhances the efficiency of the supply chain. “For instance, if a warehouse is involved in heavy e-commerce with many customers ordering just one or two items, it can consolidate products by lane for a particular carrier destined to a particular geographical area,” explains Alvarez. Another possible efficiency involves particular customers with many orders. In this case, those orders are consolidated and bulk-packed, saving on transportation and packaging costs. “In both of these scenarios, there is less consumption of resources because we are using less gasoline, less packaging materials, and less operator time, which puts us in a greener and leaner space.”

Integrate as much as possible with your customers, advises Ippolito. For instance, when customers email their orders in Excel format, Flex Solutions merely uploads the orders into its WMS system automatically. “This saves a lot of labor involved in typing the orders into the system,” says Ippolito. “We have some Web clients who send in as many as 200 orders a day, and to type that many orders into the system could take over two hours. Uploading them directly into our WMS saves us time and costs.”

When warehouse employees are more familiar with customers’ ordering practices, it can pay big dividends in efficiencies as well as in customer satisfaction, notes Ippolito. For example, Flex Solutions qualifies warehouse personnel to pull only certain products. “This means that our workers get to know what a normal order is for particular customers. So if there is an order that doesn’t seem right, a worker will ask questions. Rather than operating like robots, they can immediately detect any anomalies. If they don’t make that catch, the order goes out incorrectly, which means those products have to be shipped back here so we can ship the right products out again—which certainly is not operating green.” So the idea is to catch problems early by having trained and astute workers asking about questionable orders.

Ippolito reports that since implementing these initiatives, Flex Solutions’ savings overall equate to between 25 percent and 40 percent above a warehouse not doing things like keeping a clean and tidy warehouse, training employees relative to particular customers, integrating with customers, and recycling everything possible.

Lean and green initiatives go hand in hand with each other, states Alvarez. “This is where the formula contributes to the bottom line because you are wasting less and spending less.” No rule of thumb exists for the percentage savings a company can expect by implementing lean and green initiatives, as this depends on the starting point of a particular warehouse, he points out. “For example, if a warehouse needs to move from a manual paper process to keep up with its fast growth to the point where they need a WMS, their percentage increase in efficiencies could be as high as 70 percent.”

Building design plays a part

Even a building’s design can contribute to lean and green operations, notes Randy Fox, FADA engineering manager for Daifuku America in Salt Lake City, Utah. He reports that advanced automation allows warehouses to be built higher, significantly increasing storage density. “This reduces a DC’s environmental impact because these taller buildings use less land and less building materials,” he says. “Utility costs are lower with less building to heat, cool, or light since the automated area can be kept at ambient temperatures.”

Buildings can rise over 100-feet tall and can accommodate up to 14 tiers of racks, dramatically increasing the number of pallets stored per square foot. They are ideal for bulk storage applications where a DC is shipping pallets to customers. Automated SRMs (Storage-Retrieval Machines) complete all put aways and pulls while operating on a single crane rail running in between the narrow aisles within these buildings. “With these vehicles, you don’t have to be concerned about allowing floor space that fork trucks require for a turn radius,” notes Fox.

Automation and technology can deliver a big bang to the bottom line. For instance, automated systems can bring to warehouse workers products, totes, or pallets. “This reduces the time operators have to spend looking for products to pick,” Fox says. He adds that savings in labor and time sometimes justify the expense of an ASRS solution.

Inventory control and management is another area ripe for potential lean savings, reports Fox. “Companies can become leaner when they implement high-throughput systems that move product quickly through a warehouse or a cross-dock; they can also store products for just hours rather than days or months. Companies are not increasing their inventories, but they are using high-throughput rates to keep their inventory levels stable and low.”

Warehouses should conduct an assessment on their operations before investing heavily into automation and technology, agree the experts. “It’s a case-by-case situation, but there is definitely a significant ROI available, particularly in construction savings, labor savings, and error-free shipments,” says Fox.

Warehouses and DCs have one goal in mind and that is to lower costs, especially in this shaky economic climate, says Alvarez. “As green is a byproduct of lean optimization, that’s a double plus for warehouses.” wt



Contributing writer April Terreri writes frequently on a variety of transportation and logistics issues.