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Applying Lean Six Sigma and the Theory of Constraints in a Warehouse or Distribution Center

If you’re like most customers, getting your order as fast as possible is important and leads to a higher level of satisfaction.  While some companies take a few days to process your order, there are some World-Class Distribution Centers that focus and speed, while consistently delivering high-quality service. 

Throughput is king in the Distribution Center or Warehouse and a great way to increase throughput is to utilize the combination of the Theory of Constraints, Lean, and Six Sigma.  To increase total system throughput you must increase the throughput of the constraint or bottleneck.  To find the bottleneck you must identify your slowest performing process within the system.  A great way to alleviate the constraint is to apply the tools within Lean Six Sigma to identify the root cause(s) and to put improvements in place that will remove the non-value added activity and variation within the process that lead to it controlling your whole system.

Once you increase the throughput of the constraint, the process starts all over again.  Identify the constraint and alleviate it utilizing the Lean Six Sigma methodologies.  As in any business, Continuous Improvement in the Warehouse and/or Distribution Center will lead to better overall performance for both, customers and the business.

So how much throughput is the right amount you might ask?  What’s the difference between throughput and cycle time?  Throughput can be thought of as the quantity going through a process, where cycle time equates to the time it takes product to go through the system.  Cycle time reduction is a key strategy for most businesses, rather they measure it or not.  Shortened cycle times result in less work-in-process inventory and higher customer satisfaction.  I only caution not to lose sight of delivering a quality product or service.

Same day shipping and reduced cycle time in a Lean Warehouse or Distribution Center equates to less WIP, but striking the right balance will prove how efficient and smooth your operation runs.  Attempting to be a same day shipping company isn’t always an easy or efficient alternative.  Getting staffing levels appropriately set hour by hour throughout the outbound process of picking, quality assurance, packing, and ultimately shipping is not an easy task – especially if the orders aren’t consistent or level-loaded.  It might be necessary to work with customers to try to have as much of your daily volume placed early in the day.  This will allow your Warehouse or Distribution Center employees to properly plan the work in an efficient manner.

For more information on applying Lean Six Sigma in your Warehouse or Distribution Center contact us today by email at info@bizworx.org or by phone at 316.641.2088.

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