Warehouse Process Redesign

"Process redesign involves the fundamental rethinking and radical re-design of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost quality, service and speed.' Hammer & Champy.

Australia faces some of the highest operating costs for real estate and warehouse operatives – e.g. average labour cost across the U.S.A. is US$28,000 while in Australia it is Au$71,600 (US$57,770) So how do you operating efficiency without investing in additional material handling equipment?

In the typical warehouse a very good example of inefficient operations can be seen in the activity of Order Picking

  • Typically 50 - 60% of the pickers time is still spent travelling and upto 90% of a pickers time is not actually picking the order
    • Process redesign along with improved product slotting (link to slotting page) typically reduces the time spent travelling or eliminates unnecessary non picking activity
    • Process Improvement relates to reviewing picking strategies such as zone, cluster and wave pick as well as reviewing the non pick activities such as finding pick locations, checking items and other support activities

To understand warehouse productivity improvement opportunity Logistics Change analyse you current processes to identify "Muda" in the process and then redesign the process to minimise or eliminate this waste using well established techniques which reduce the TAKT times (TAKT Time is the start to finish time for the process) and input ratios by 20 - 30%.

Logistics Change's Service includes:

  • Review of current processes to identify Muda
  • Design of New or Redesign of Existing Processes
  • Review and analysis of TAKT times

"Muda" refers to any activity which absorbs resources but fails to create value. Removing this activity often saves 30% of input and paves way for warehouse productivity improvement.

Example of "Muda" are:

  • Rectifying Mistakes – better to get the process right first time – eliminating mistakes
  • Non required Process Steps – unnecessarily complex processes absorb input and are wasteful
  • Movement of employees and equipment without a value adding purpose
  • Employees waiting because upstream processes have not delivered on time
  • Goods and services which do not meet the needs of the customer;
  • Maintenance of equipment which is not required
  • Unnecessary or increased travel

Processes can include but are not limited to:

  • Pre Receipt (A.S.N.s etc)
  • Order Assembly
  • Receiving
  • Checking and Packing
  • Putaway
  • Despatch
  • Replenishment
  • Stocktakes and Cycle Counting
  • Order Release Selection


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