If you’re involved in running a distribution business, you may be familiar with the concept of lean distribution.
Borrowed from the principles of lean manufacturing – a system which seeks to eliminate anything in the manufacturing process that doesn’t add value – the lean distribution model provides a practical and effective method for eliminating waste in your operations, resulting in improved customer satisfaction and increased profits. And waste in this context does not just refer to material things; it can include the wasted, or the inefficient use of, time, effort, technologies and business processes.
The key to good retention is to make your clients’ experience with your organisation the quickest, easiest and most painless one possible. The way to achieve this is through streamlining your business processes.
While many distribution business managers may claim that they apply some form of lean distribution, the reality is that most have not done a deep dive into this way of operating. However efficiently a distribution company is run, there is almost always room for improvement.
The Warehouse
Your warehouse plays a critical role in your supply chain.
- Are items in your warehouse stored in a way that promotes maximum efficiency?
- Are the most popular items the easiest ones to pick? Are they located nearest the door?
- Same with categories of items. Are the various product categories set out in a logical, easy-to-navigate manner?
- Does your warehouse include shelves of old items that are no longer ordered and can be stored elsewhere or discarded?
‘A place for everything and everything in its place’ is a maxim that applies well to warehousing.
And what about training – are your warehouse personnel up to speed on industry best practice? The ultimate goal here is a warehouse that can fulfil customer orders faster using the least space and the least inventory.
One of the biggest barriers to adopting lean practices is organisational. Any distribution business making the transition to a lean environment requires the active leadership of managers, who need to take ownership of the process. Management need to have a clear sense of why there is a need for change and the areas in which useful changes can occur. For a lot of distribution companies, this will involve a change of leadership style, from supervisor and problem-solver to that of coach, mentor and teacher.
Bringing team members on board is all-important. Your employees are your eyes and ears on the ground, and they often know better than management where things aren’t working as well as they could be. But too often, workers lack the incentive to speak up. Actively promote a work culture that encourages feedback and rewards useful suggestions for improvement. It’s on the floor of your distribution centre that the rubber hits the road. Inefficiencies in this area will slow the supply chain and risk customer disappointment.
There’s so much to consider here, and it can begin by looking at the way you use your floor space.
- Is everything set on your floor so that items flow through it at optimal efficiency, without double-handling and without error?
- Are your orders picked from pallet racks where flow racks would be better?
- Do you often have boxes and pallets laying around for longer than they need to be?
- Do you have tables and equipment scattered around haphazardly and without an obvious purpose?
- Is the equipment workers need to do their job always within arm’s reach?
For many distribution businesses, a worthwhile lean-driven goal is standardisation. This is a system for ensuring that all workers are carrying out their tasks in the same pre-determined way. One of the aims of standardisation is to reduce variation and errors as part of the distribution process, and comes about by allowing employees and management to collaborate on the best, most efficient methods to get items out the door and in the hands of customers. The resulting ‘best practice’ methods are fully documented with instructions on how they should get followed.
Standardisation is one of the foundations of continuous improvement in a well-run lean distribution business.
The Customer
In a lean distribution environment, everything is done with the customer in mind. Getting the right products to the right customers in the most timely and efficient way is the never-ending goal. The lean model emphasises the ‘pull’ of the customer, where the distribution process is led by customer demand, rather than by the company’s operational capabilities. If your firm is more systems-driven than customer-focused, you may find yourself losing business to your more nimble, lean-orientated competitors.
And that’s just a start – There’s plenty more involved, of course, but what should be self-evident is that the benefits of a lean distribution environment are varied and significant. The growing adoption of lean practices almost guarantees that distribution businesses that don’t go down the lean path will be outperformed by their competitors so it’s not something that can be easily ignored.
