Guest Commentary: Cultural Transformation is at the Core of Continuous Improvement in Warehousing and Distribution

Today, more than ever before, companies are looking for ways to implement Lean manufacturing concepts into their distribution and warehousing network as a way to control costs and improve operational performance. This research often leads to the purchase of new technology or equipment. But while investment in these tools might create incremental savings, there’s a far more effective resource that’s often overlooked: employees.

The successful implementation of Lean in a warehouse setting truly begins with a cultural transformation. An organization’s people are its most valuable asset — one that is already in place, and with training and information, is poised to deliver sustainable savings and create operational efficiencies with staying power. It’s this cultural transformation that enables a continuous improvement environment to exist. The Lean journey begins when employees are empowered to act as the primary agents of change.

Think of the employee as the surgeon and the warehouse as the operating room. The surgeon’s time is the most valuable. He or she is the one that is essential to the care of the patient, the one that makes the biggest impact on their health and recovery. It’s the responsibility of the support staff, which in the warehouse case would be the management team, to make sure the surgeon has all of the available tools, training and equipment, as well as a room that is prepped to allow them to deliver the highest level of value in the shortest amount of time to maximize their efficiency.

Employees on the warehouse floor are “the surgeons.” They know exactly what they need in place to do their job efficiently, while also adhering to high quality standards. The management team has to listen to them and learn what those needs are and make sure they are creating an environment where the employee can thrive and be the most productive. To drive the highest level of value, it is critical that warehouse associates are encouraged to identify and own the elimination of waste and inefficiencies. Doing so not only reduces costs, but increases employee engagement because they are being empowered to make their jobs easier. Through the act of Lean “Kaizen events,” or small focused efforts aimed at identifying areas of inefficiency and creating solutions to resolve them, employees take ownership of the problem-solving process. It is the job of the leadership team to make carving that waste out possible.

Getting employees to a place where they feel comfortable pointing out problem areas within their workplace isn’t a simple process. Those organizations with the best chance of success have implemented Lean over time and have done so by keeping their employees informed and by building trust. It’s critical that the communication lines remain open with employees from the start. Management has to explain what brought them to adopt a Lean philosophy and what their expectations are moving forward. Why are we doing this? What is the organization’s vision?  What is its strategy? Why should the employee help advance the cause? It has to be easy for people to understand and it requires an investment of time and training on behalf of the company. Once employees understand an organization’s core values and areas of focus — and that an efficient operation leads to profitability and thus job security for them — change can be generated from the warehouse floor. This, of course, means teaching employees how to utilize tools and Lean processes such as value stream mapping and visual management, or how to conduct a Kaizen event. It’s an evolutionary process.

Helping employees realize that they’re responsible for the collective success of the team in the warehouse is absolutely crucial. Visually displaying progress in real-time using Lean tools like at-a-glance boards is an effective way to do this. However, they are just that — tools. It’s what the employee does with the tools that really makes the impact. In the warehouse, a picker, for example, should know how many picks he needs to complete during a standardized work increment. How is the quality? Is he under capacity or over capacity? It’s difficult to pinpoint areas for improvement without knowing where one stands. Insight and knowledge engages the employee to champion change.

New warehouse management systems and other physical equipment can help companies gain incremental savings. But real savings occurs when you unlock the true power of Lean, empowering the employee to make the changes that they know need to be made on the warehouse floor. The employees drive the long-term, sustainable results. So, when you teach your employees how to identify problems, and you give them permission to solve those problems — and your leadership team supports those actions — then it becomes self-perpetuating. This isn’t a top-down approach. It takes on a life of its own, and that’s what really carries organizations to the next level in terms of operational performance and efficiency.

Carl Fowler is Senior Director, AIG Business Development at Menlo Worldwide Logistics. During his eight-year tenure with Menlo, he has worked in transportation, warehouse operations, account management and business development, and has earned a senior leadership role responsible for the company’s 4PL product offering. With an extensive background in manufacturing and warehousing distribution, Fowler has been immersed in the logistics and supply chain industry for more than 17 years. During that time, he has had the unique opportunity to work at all levels of the automotive logistics industry, from large tier-one suppliers to one of the early lead logistics providers at General Motors.

Comments

  1. Carl: Fantastic article and timeless lessons on how to run any business, especially one as labor intensive as warehousing, through getting the “ground floor” involved. Making it “their business” is crucial to the success of the DC and you have captured the essence of this well.

    I especially agree with the idea it becomes self perpetuating. Eventually the idea of continuous improvement is where everyone wants to be and that is a great place.

    Again, great article and look forward to more thoughts on the topic.

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