Six Sigma and WarehouseDistribution
August 13, 2007 at 9:47 pm #47818
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I’ve just joined my company in November of last year and was immediately allowed to lead a SS project. The project was/is geared towards decreasing the the number of times that a picker goes to a bin to pick product and the product is not there. We are seeing major gains and are acheiving goal and look to really see a major improvement in the the picking process.
My question is, in the warehouse and distribution industries, where else can six sigma be of benefit? We have one more tollgate and will be looking to start the project selection process again. I would like to hear from others involved in the industry who have used SS. Thanks.0December 1, 2007 at 7:05 am #165566
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I’m somewhat of a Six Sigma novice (familiar w/ a few of the terms and concepts) but I have pretty extensive experience with Lean principles and understand that the two methodologies overlap pretty often. I’ve led a similar project at our DC reducing ‘bouncers’ as well.
I can say that there have been numerous improvement opportunities for us in other areas which could probably be worthwile SS projects.
One of our first projects was to localize our suppliers of boxes/dunnage and increase their delivery times. This allowed us to reduce the amount of on-hand inventory of these materials and improve cash flow position. Then, we centralized our boxes and dunnage in a specific area and created a ‘water spider/strider’ position to deliver these materials to our receiving/prepack and shipping/packout stations each day. We limited the amount of materials that each operator could have on hand, but ensured that it was at least one day’s worth. We also put the materials on a kanban system to control stockouts and inventory levels. This reduced waste (waiting, transportation, etc.) for our operators in these areas for materials and also allowed us to further reduce on-hand inventory and improve cash flow. While the cost of these materials increased slightly, the free cash flow more than made up for it (20-30% savings)–not to mention the additional floor space we acquired.
Another project we successfully implemented was ensuring our fast-moving inventory was lowered and located as close to our shipping areas as possible. This has obvious advantages and is pretty standard with most warehouses, but this place was behind the times.
Not sure if your environment is focused on moving bulk inventory of if there is a high variation in lines per order and number of SKU’s (here’s hoping the former for you) but we found that a high percentage of our orders were coming from a specific area where we stored small parts. We located a packout line in that area to handle all orders which consisted of parts solely from that area. This resulted in our freedom to remove conveyance from our operations and shorten lead times. (moving one pallet of product from packout to truck rather than each part to the dock to pack out). Big savings in labor requirement too.
The most successful project we’ve had, however, came from changing from a ‘pick by zone’ operation to a ‘pick order complete’ operation. Again, not sure what type of environment you’re looking at, but conventional wisdom would have you believe that picking multiple orders by zone would reduce your equipment needs and labor requirement by reducing travel time. Conventional wisdom is wrong. This was a large-scale project and too complex to discuss in detail here, so I’ll let you do your own math, but we realized a 19% reduction in lead time (from point of order print to completion of shipping function) picking order complete and eliminating a consolidation function. Again, this was for a DC with over 70,000 unique SKU’s and an average of just over 3 lines/order. It would be different for a bulk environment.
Not sure if any of this is what you’re looking for, but good luck to you.0December 1, 2007 at 8:11 am #165569
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