EBOOK

Warehouse
Operations
Management
Overcome the pains of training
Even if you are short on time

by how.fm
Warehouse Operations
Management

Overcome the pains of training

Even if you are short on time

by how.fm
 This ebook is part of how.fm’s ongoing support of all those
in the manufacturing and warehousing space. We endeavor to
assist you—both virtually and offline—with better worker on-
boarding, retraining, and long-term performance manage-
ment.

SoundReply Solutions GmbH

Oskar-Jäger-Straße 173 50825 Cologne Germany

www.how.fm
PROLOGUE
In this four-part booklet, you will have the opportunity to
explore the many issues facing warehouse managers in this
rapidly changing world of logistics and supply chain manage-
ment. We will take a look back at those trends that were just
beginning to redefine warehousing prior to the global pan-
demic and discuss why it’s important to always be merger
ready; if not in the classic sense, then—and at the very least—in
a value-added capacity. We will look at how third-party logis-
tics continues to make waves in fulfilment centres around the
globe and why multi-party logistics is likely to become even
more automated in the next few years.

We will investigate still more challenges in the staffing space

— with an especial focus on how best to hire temps and other
seasonal hires by creating lasting partnerships with local re-
cruitment agencies. We will next focus on improved training
methodologies so that you can get these personnel up to speed
as quickly as possible while also accounting for any language
barriers they may have in the warehousing space.

We will investigate still more best practices around training

staff with an especially focus on health, safety, and the dangers
that are growing increasingly pervasive in fast-moving ware-
houses. We will consider OJT as the best delivery method for
leveling up your staff’s skills while also arguing that the bene-
fits of training personnel greatly outweigh the costs. We will
also discuss how best to implement automation alongside
high-tech employees—especially head of industry 4.0.

Lastly, we will provide some background on Lean Six Sigma

with a balanced approach of implementing such practices not
only out on the floor but also in other areas of the business. We
will look at how to ensure all employees have access to stan-
dard operating procedures once you and your team have op-
timized all inbound and outbound processes.
PROLOGUE..................................................................................4
INTRODUCTION .........................................................................6
CHAPTER 1 - Warehouses.......................................................11
WAREHOUSE TYPES .............................................................................................13
WAREHOUSE LAYOUTS ........................................................................................17
WAREHOUSING INDUSTRY CHALLENGES .......................................................18
THE MODERN WAREHOUSE ................................................................................21
WAREHOUSE MANAGEMENT .............................................................................24
OPTIMIZING FLOW ...............................................................................................25
OPERATIONAL CHALLENGES .............................................................................26
MAIN CHALLENGES..............................................................................................27
CONCLUSION .........................................................................................................30

CHAPTER 2 - People Management .........................................33

CONCLUSION .........................................................................................................43

CHAPTER 3 - Workforce Training .........................................46

TRAINING: 5S ........................................................................................................66
CONCLUSION .........................................................................................................70

CHAPTER 4 - Lean Warehousing ...........................................72

CONTINUOUS IMPROVEMENT ............................................................................81
STANDARD WORK .................................................................................................88
EQUIPMENT ...........................................................................................................94
SOFTWARE .............................................................................................................94
PICKING STRATEGY: PICKER-TO-GOODS ......................................................100
AUDITS .................................................................................................................112
3PLS ......................................................................................................................120
CONCLUSION .......................................................................................................123

SUMMARY ...............................................................................125
AFTERWORD ..........................................................................129
INTRODUCTION

T
o stake the claim that the world of supply chain man-
agement, warehousing, and transportation are un-
dergoing yet another revolution not unlike that last
seen in the late 1800s is to state the obvious. But what, exactly,
is evolving and how can general managers and site leads get
out in front of such dynamic changes as those taking place
around robotics, augmented reality, online training, and
more?

Answering these questions—and more—is what this booklet

intends to do. By weaving together a number of discussions
that cover everything from warehousing to personnel man-
agement, workforce training to continuous process improve,
the reader will be able to walk away with a better foundational
understand of what it takes to succeed now—and in the fu-
ture—in the fast-moving logistics space.

This book matters for still more reasons besides the evolu-
tionary, which is to say that it is focuses on certain trends that
never go out of style or are otherwise iterated upon from one
revolution to the next.

Consider, and when taken with personnel management,

there will always exist a need to onboard, retrain, and perfor-
mance manage employees. Now, these workers are no longer
to be treated like automatons as was the case during the first
industrial revolution; rather, should be seen as the one com-
petitive advantage that other logistics providers cannot dupli-
cate.

In today’s warehouse, then, associates need to feel empow-

ered to look for and engineer out the eight different kinds of
waste they might encounter throughout the course of a shift.
They also need to know how to safely operate in the lingua
franca of their site.
 This last consideration—or needing to coach new hires us-
ing a language neither employee nor supervisor is entirely
comfortable with—is becoming more and more frequent as
warehouses scramble to find enough personnel to staff their
day-to-day operations.

As more and more workers prepare to retired, this trend will

likely only be made worse with those that do possess experi-
ence in supply chain management being highly sought-after
across multiple 3PLs and delivery services.

And while some may see this issue as a looming threat,

there are still others that believe this skills gap offers up a
unique opportunity in which to rebrand warehousing and
transportation as cutting edge and to reshape their entire
training philosophy around this belief. Creating career devel-
opment programs and learning management systems will be
essential in achieving this outcome of low employee turnover
with highly skilled personnel capable of managing robots, op-
timizing their own pick paths, and looking for areas to im-
prove operations.

This booklet will also touch on the difficult job of trying to

manage, monitor, and control—all at the same time—cost,
compliance, safety, productivity, and quality both on the shop
floor and in the back office.

This kind of floor management can feel like an endless bat-

tle, but it’s about balancing what the team needs to know with
how to perform key tasks. This can be made easier by follow-
ing best practices born of lean and Six Sigma or otherwise im-
plementing a step-by-step framework that can help operations
managers identify a problem or opportunity, research poten-
tial best practices, experiment around different solutions, and
then carefully select, standardize, and control the resulting
process.

Such looping should be made routine so that teams remain

flexible and willing to implement or—and at the very least—try
a new way of working to see whether they could reduce costs
still further, reduce the number of quality defects within the
warehousing space, or improve the customer experience.

Another reason this book matters is not just its timeless-

ness, but also the fact that warehousing and logistics is only
going to grow increasingly complex and, so, GMs are encour-
aged to think about their positioning in the industry as they
page through each chapter.

Consider, and in returning to the discussion about rebrand-

ing the warehouse as an innovative space, site leads need to
reconsider their current operational space as a newly-minted
MBA graduate or millennial. These workers are looking for a
strong digital culture, training, and coach as well as learning
platforms that support their career goals.

Additionally, and in trying to sell the rough-and-ready world

of picking, stowing, packing, and receiving as a viable long-
term career option, GMs need to also look at their fulfillment
center as if they, themselves, are a new hire. What questions
will they ask? Will they be made to feel unsafe? Do they feel
empowered enough to ask questions? Do they receive all
company texts and messages?

What about technology—are they simply handed an RFID

scanner or are they given the opportunity to learn how to op-
erate an automated guided vehicle? Are they routinely audited
or tested on their use of forklifts and do they have past experi-
ence working with drones or similar devices?

The booklet will also cover the importance of maintaining

workforce training records as well as encourage GMs to have
all personnel—regardless of whether they are in the front- or
back-of-house—cross-trained so that in the event of a person-
nel shortfall customers don’t suffer.

In thinking through Peak season, it’s important to create

contingency plans around upstaffing. This often comes in the
form of temporary hires or temps. These individuals should
not, however, be treated as expendable resources; rather, care-
fully vetted months in advance so that when the time comes,
there is a pool of individuals ready to get to work.

This is most critical, of course, in the picking department.

Unfortunately, and as will be discussed, this team too often
gets the short end of the stick. In other words, quality defects
that are not caught upstream in receive or stow will wash
down to the individual in charge of fulfilling a critical order
with minutes on the clock before the last truck of the day de-
parts the site.

Preventing such frustrations, of course, goes back to cross-

training all individuals in this function so that more care is
taken at the dock doors and that unacceptable product is
turned away so as to avoid polluting the site and reaching the
ultimate end user.

Sites should also look at different types of picking—case lots,

singles, multis, and pallets, just to name a few—as well as how
to optimize the pick path realizing that this will need to be re-
visited based on the season or when consumer buying pat-
terns change.

Lastly, the book concludes by discussing several trends that

were taking shape after the 2008 financial collapse, but well
before the 2019 pandemic and which will likely remain rele-
vant before, during, and after the next unforeseen global cri-
sis.

These include the topic of supply chain consolidation, which

had been taking place in the latter half of the 2010s with
ecommerce platforms largely playing the role of a monopoly.
The booklet surmises that mergers and acquisitions will re-
turn to the world of logistics—but in a slightly different man-
ner.

To wit, past tie-ups usually took the form of verticals or

pipelines that saw 3PLs bridge the divide between manufac-
turers and distributors or delivery sites and end users. The
current state of the supply chain, however, indicates that hori-
zontal partnerships may become more prevalent.

Consider, FedEx and DHL have long partnered with national

or regional postal services, but now the space is growing in-
creasingly fragmented with local delivery personnel and star-
tups working together to ensure packages get to the right cus-
tomer at the right time and in the right quantity.

Another of these past-to-present-to-future trends includes

structural changes and tradeoffs around inventory. Just-in-
time and other lean practices had all but put an end to buffer
or safety stocks, but with the 2011 tsunami, multiple dock
worker strikes, and, of course, the pandemic there was once
more a need to get creative around having certain items on
hand in vast quantities.

And while the jury is still largely out on whether any of these
trends or projections will come to pass, each is a great place in
which to jumpstart FC-wide discussions about how to improve
warehousing, personnel management, and workforce training.
These inclusive debates should look to build a culture that is
not only continuously thinking about how to optimize for the
future, but also ready to design training programs, processes,
and safety protocols that move the entire industry closer to
long-term sustainable operations.
CHAPTER 1 - Warehouses

s the long tail of consumer demand continues to grow

A increasingly segmented, supply chain professionals

are being forced to reconsider how they set up their
warehousing and distribution networks so as to remain rele-
vant well into the future. There are many types of traditional
warehouses, but, and in going forward, logistics firms will
need to take into account more than square footage when de-
signing or upgrading their facilities. Viz., consumers are no
longer satisfied with business-to-business (B2B) distribution
and, instead, demand either business-to-consumer (B2C) dis-
tribution or direct-to-consumer (D2C) models replete with
real-time tracking updates and notifications.

No longer, then, can warehousing sites simply act as stock-

holding points. The advent of e-commerce has completely al-
tered the warehouse landscape as has the necessity for cost
reduction and the growing pressure to reduce the impact of
logistics operations on the environment.

The future of warehousing is likely to be less about static in-

ventory management, then, and more to do with dynamic op-
erational throughput. This may well reduce fixed costs (i.e.,
storage and handling as seen in Figure 12.1 below), but, con-
versely, drive up variable costs associated with the last mile of
delivery.
Source: Adapted from Richards, G., A complete Guide to Improving Efficiency and Minimizing Costs in the Modern
Warehouse, London, Kogan, 2018

What’s more, and before turning to the topic of warehouse

archetypes, logistics professionals are likely to encounter con-
sumers that are no longer willing to incur the additional costs
associated with expedited shipping and handling that were
normally passed along to shoppers. Instead, they will have to
account for these expenses internally given the low-cost lead-
ership model that is now pervasive throughout the industry
and which has pitted powerhouse firms like DHL and FedEx
against relative newcomers to the third-party logistics (3PL)
word (here, read: Amazon) and which threatens the vary exis-
tence of small, localized traditional warehouse delivery firms.
WAREHOUSE TYPES

Fulfilment centers

As noted, the growth of e-retailing has driven fulfillment

centers, or FCs, to modify their footprints in recent years.
These warehouse types are now designed and equipped
specifically so as to manage large volumes of small orders.

There are three types of FCs, with the first being integrated
types, where Internet sales are carried out alongside existing
retail operations. The second model is that of dedicated fulfil-
ment or a building that is built for a specific purpose. Lastly,
there is store fulfilment, which involves picking online orders
from existing retail shelves for separate delivery. As an exam-
ple, Shutl provides this off-the-shelf, same-day courier service
and has achieved record delivery speeds of some 13 minutes
and 57 seconds for its users.

When modified or special e-fulfilment operations are called

for, then, it is no surprise that 3PLs have led the charge. For
instance, those companies involved in grocery home delivery
have developed smaller vehicles with compartments that ac-
count for different types of grocery products to include ambi-
ent, fresh, chilled, and frozen items.

Internal operations have also evolved over the past decade

with a number of different logistics solutions having been de-
veloped to store and pick items since building special ware-
housing structures is not only cost prohibitive, but also short-
sighted given how quickly consumers taste and product pref-
erence changes. That said, those 3PLs that are able to recon-
figure their current footprints have met with success and will
likely continue to do so should they commit to flexible fulfill-
ment by setting aside designated high-velocity lanes within
their pre-existing facilities.
Fashion logistics

With large and fast-changing product ranges, as well as

dramatic seasonal fluctuations, the fast-fashion industry has
demanding logistics requirements. In order to balance distri-
bution capacity between replenishing retail stores, fulfilling
online orders, and dealing efficiently with returns, warehouse
automation is an increasingly attractive option for those firms
that stock and ship articles of clothing.

Fashion products are either boxed or travel as hanging gar-

ments. This product mix requires different handling capabili-
ties in order to ensure that expensive items of clothing are not
creased or crushed in transit. What’s more, supply chains
have to increasingly answer for wasteful packaging as well as
the returns cycle, which, in and of itself, can prove harmful to
the environment and a company’s reputation when unwanted
garments end up in a landfill or otherwise traced back to care-
less returns personnel within an FC.

Reverse logistics centers

With so many goods and products being purchased, sight

unseen, from online retailers, there is now a burgeoning need
to update returns processing and handling. Consider, clothing
catalogue goods have between 18- to 35-percent of their origi-
nally delivered goods returned whereas electrical catalogue
companies report ‘only’ four- to five-percent. This redirection
of the flow of commerce is what is now oft referred to as ‘re-
verse logistics’.

The growth of e-retailing and specific environmental legis-

lation such as the European Union’s Waste Electrical and Elec-
tronic Equipment (WEEE) Directive (2007) has compelled
companies to focus time and energy on reverse logistics. To-
day, companies recognize that returning product to stock or
disposing of it quickly can positively affect cash flow.

Organizing the physical return process is not without its

headaches, of course, as 3PLs need to arrange for transport as
well as the ‘rechecking in’ operation. The latter not only means
that companies need to staff and train quality-oriented per-
sonnel, but also follow up on whether their ‘go or no-go’ deci-
sions are being implemented further up the supply chain. In
other words, and once a condition is verified, are supervisors
ensuring that certain goods are quarantined and not inadver-
tently redistributed. This phase of the reinduction process is
important, especially if there is a warranty or refund issue.

Finally, there is a requirement to determine the disposition

options, or: repair, re-use, refurbish, resell, recycle, or dis-
card. This will drive the need to formulate, and control for, the
application of a standardized policy covering these options.

Fulfillment Factors

In returning to costing strategies for a moment, the e-com-

merce phenomenon will continue to impact the evolution of
B2C and B2B warehousing models, especially from a demand-
side point of view. In other words, shoppers no longer view
home grocery delivery services, as just one of a myriad of ex-
amples, as a nicety or convenience, but, rather, a prerequisite
from a 3PL provider.

This shift in customer expectations will force both retailers

and manufacturers to squeeze their margins still further by
selecting distribution networks and supply chains that offer
considerable cost savings with an eye on environmental con-
cerns that, and if not account for properly upfront, might af-
fect the upstream provider’s reputation or goodwill. Ware-
houses, then, will be expected to be more efficient and cost-
effective or, otherwise, risk their own long-term viability.

The sustainability agenda will also play a key role in the evo-
lution of new supply chains. The subsequent knock-on effects
of smarter networks might include the regreening of brown-
field sites alongside a reemergence of canal, rail, and river
networks as well as a renewed focus on self-sufficiency in
terms of energy use.

Warehouses in highly developed countries will no doubt

adopt the latest technology with companies whose finances
can absorb the high initial capital costs of such investment
leading a charge into warehouse automation vis-à-vis ERP
software packages, among other high-tech solutions.

That said, and as discussed previously, automation is not a

panacea for poorly run warehouses. FCs will have to strike a
balance between traditional operations such as receiving,
stowing, picking, and packing products and which rely heavily
on well-trained personnel and the oversight offered to super-
visors by way of SaaS or cloud-base analytical solutions.

Source: Adapted from Richards, G., A complete Guide to Improving Efficiency and Minimizing Costs in the Modern
Warehouse, London, Kogan, 2018

In order to remain an integral supply chain partner, and as

seen below in Figure 3.1, warehouses will need to focus on
“value added” services that prevent D2C or B2C from either
circumventing or subsuming their role in downstream opera-
tions.

Warehouse Processes

The seminal shift in how shoppers increasingly buy via mul-

tiple touch points (i.e., computer-based browsers, mobile de-
vices, in-store, et al) has created the need for “smarter” ware-
houses in order to serve today’s connected consumer.

As retailers look to merge their brick-and-mortar operations

with online sales platforms, warehouse management systems
(WMSs) will need to prove to FC leaders their ability to cut
costs and boost efficiencies.
 As warehouse executives prepare to meet and maintain this
ever-increasing level of the volume over the coming years, ex-
ecutives continue to rank outfitting staff with new technology
as well as increasing the use of barcode scanning and tablets
as their top priorities.

Additionally, this same leadership cohort is keen to leverage

the interconnectedness of the Internet of Things (IoT) network
and, so, invest in optimized supply chain sensors, hardware,
and software.

Striking a balance between traditional warehousing opera-

tions (as seen in Figure 3.2, below) and integrating additional
3PL functionality will be critical, then, for those FCs and dis-
tribution sites that seek to remain relevant in this next evolu-
tion of supply chain management.

Source: Adapted from Richards, G., A complete Guide to Improving Efficiency and Minimizing Costs in the Modern
Warehouse, London, Kogan, 2018

WAREHOUSE LAYOUTS
Typical layout

As an aside, and as seen below in Figure 4.9, one area of op-

portunity for warehouse managers would be in viewing their
FC footprint as a sort of product in and of itself. This is to say
that the facility must adopt a form-fit-function model and only
use traditional racking, throughput diagrams, and the like in
order to perform, optimally, high-velocity picking and packing
operations. Ultimately, a customizable and adjustable layout
would prevent the basic inventory holding point or DC from
becoming irrelevant in the consumer-driven, single-pack fu-
ture.

Source: Adapted from Richards, G., A complete Guide to Improving Efficiency and Minimizing Costs in the Modern
Warehouse, London, Kogan, 2018

WAREHOUSING INDUSTRY CHALLENGES

E-commerce Site Difficulties

Chiefly, warehouses remain significantly hampered by sea-

sonality. The demand on staff and equipment varies tremen-
dously with the seasons. Consider, large, bulky items such as
barbecues and garden furniture much be shipped ahead of
spring and summer, but before smaller electrical products
during the run-up to Christmas. These place very different
demands on staff as well as handling and storage equipment,
especially when the latter is highly specialized or unable to be
modified so as to take on both workloads.

Secondly, the wide variety of products stored requires ware-

house managers to efficiently process low-value, single-item
orders. This is one of the main challenges facing the majority
of FCs today, but, and in particular, those dealing with Inter-
net-based orders. Picking and packing low-cost items not only
utilizes the same amount of labor and equipment as high-cost
items, but is also hard to recover in terms of volume in order to
make up for the hit to already slim profit margins.

Thirdly, as consumers flex their muscles in the market, ac-

curacy and on-time delivery become paramount if companies
are to retain the loyalty of their customers.

Inventory management is another challenge for the ware-

house manager. The increase in the number of product lines
will continue to put pressure on the number of pick locations
whilst slow-moving and obsolete lines will likely take up
much-needed space in the warehouse. From a picking point of
view, then, the proliferation of product lines will result in FC
team leads having to look at alternatives to ground-floor pick
locations such as mezzanine floors, flow racking, and
carousels.

In order to free up vital space within a warehouse, then,

stock turnover has to be managed well and decisions made
quickly regarding the disposal of low-velocity deadwood and
other high-dwell items.
 As discussed earlier, one of the main byproducts of e-com-
merce is the large number of returns. These can account for
some 40-percent of outbound volume. What’s more, many of
these items are resalable, but come at a considerable cost giv-
en that they require a quality check, assessment, potential re-
fund, refurbishment, restock, and return to inventory both
physically and virtually.

Long-term Operational Tests

One of the biggest challenges is the growth of e-commerce.

This is already resulting in the following bottleneck con-
straints, or:

• Smaller, high-frequency orders

• Shortened order lead times
• Next-day delivery expectations
• Same-day delivery expectations
• Increase in home delivery
• Increase in personalization of items

Other challenges are as follows:

• A greater proliferation of product lines or SKUs

• Real-time accounting and information distribution
• The need to achieve the perfect order to ensure competi-
tiveness
• A requirement for lower overall inventory and sustain-
able cost reduction initiatives
• An increase in the cost of land and rents
• Increasing labor costs
• Ageing populations in many countries
• A shortage of skilled labor
• A shortage of management knowledge and expertise
• The moral question as to what to do with displaced staff
on a large scale
• Product security and the prevention of shrinkage
• Item traceability
 • Cold chain storage and distribution
• A greater need for systems integration between ERPs,
WMSs, and TMSs, among others
• Adoption of cloud-based systems alongside resistance to
their use due to data security concerns
• Overall data security and customer information storage
issues
• Local and global regulations and protectionism
• Sustainability demands and pressure for more environ-
mentally friendly warehouses
• Investigating the validity of Industry 4.0, M to M (Ma-
chine to Machine), and the IoT

THE MODERN WAREHOUSE

Finally, the following aims and ideals provide insight into

what a “perfect” warehouse or FC will need to consider in or-
der to remain relevant within consumer-driven supply chains.
These goal end states encapsulate a number of different as-
pects and topics that should only be ignored at the risk of a
firm’s reputation and viability, or:

1. Professionalism: Warehousing will need to be viewed as

an integral link in both upstream and downstream opera-
tions.

2. Customer awareness: FCs will no longer be able to dis-

sociate with the end user and, therefore, take into account
his delivery and item shipment preferences.

3. Measurement: Warehouses will need to implement,

monitor, and control for key customer-facing metrics, es-
pecially as regards delivery windows as well as internal op-
erational takt time.

4. Operations planning: FC leaders will no longer be able

to react to last-minute customer demands or order fulfill-
ment requests, but, rather, will need to plan ahead and ad-
just their critical pull times accordingly.
5. Centralization: The trend will be towards larger, central-
ized warehouses instead of smaller, decentralized ware-
houses.

6. 3PL warehouses: Partnerships around Peak season will

see an increase in specialized warehouse use and reconfig-
urations

7. Pace: The reduction of lead times, shorter product lives,

and increased inventory turnover will result in an increase
in warehouse velocity.

8. Variety: Different SKUs and additional special customer

requirements will mean employees will have to become
highly-skilled, cross-trained generalists.

9. Flexibility: Due to the increase in warehouse pace and

variety, all warehouse systems, equipment, and people will
need to become reconfigurable and highly adaptable.

10. Uncertainty: Risk and uncertainty will need to be coun-

tered with disciplined operations.

11. Integration: Activities within the warehouse (i.e., receiv-

ing, stowing, picking, and packing) will need to consider
upstream and downstream activities so as to avoid redun-
dancies or other forms of waste.

12. Inventory accuracy: Simple sample and cycle counting

will need to be maintained in accordance with Six Sigma
standards of no less than a five-percent error rate.

13. Space utilization: Space will need to be more efficiently

and effectively utilized.

14. Housekeeping: Quality housekeeping will be a priority

and a source of employee pride.
15. Order picking: The criticality of order picking will be
understood and codified by standard operating procedures
and layouts designed to maximize picking efficiency and
effectiveness.

16. Human resources: Every manager will be dedicated to

creating an environment in which employees are motivat-
ed, challenged, and supported daily.

17. One-stop shop: Suppliers, customers, and distributors

will need to partner frequently in order to create single-
service locations that are capable of order receipt and ful-
fillment no matter the source of the request or the prod-
uct’s final destination.

18. Automation: Advanced technologies will be more easily

embraced and economically justifiable via ROI calculations
and CBAs.

19. Automatic identification: Affordable, reliable tracking

systems will become the norm for data acquisition and
transfer.

20. Control systems: Real-time, paperless control systems

will be used throughout modern warehouses.
WAREHOUSE MANAGEMENT

Warehouse operations

Standard warehouse procedures include receiving, stowing,

picking, packing, and outbound activities.

The key element to consider across each of these operations

is the conflicting priority of maximizing space ute rates by
function while minimizing the time required to complete the
activity. What’s more, each operations demands the use of
equipment such as forklifts, racking, and information and
communication technology (ICT). Indeed, it can be difficult to
discuss warehouse operation without discussing equipment
requirements.

Accuracy and error prevention

Another key aspect that cuts across each operation is the

need to maintain and sustain quality from the moment an
item is received until it passes through an FC dock and into an
awaiting trailer. So called “pick-errors” and mistakes noticed
by customers are often times the result of items not having
been fully assessed during their receipt and which would have
prevented the injection of a quality defect from the start.

Errors can, therefore, come from any number of standard

procedures, or:

• Receiving: Accepting packaging, labelling, incorrect

products, pack quantities, varied pack sizes, damaged
goods, and the like from manufacturers that is inaccurate.

• Stowing: Placing items in the wrong locations, loose

parts in bins getting mixed, and ambiguous location la-
belling, among others.

• Picking: Time pressures, unclear instructions, and an

inability to find a item due to product drift.
 • Packing and Transportation: Incorrect addressing,
proof of delivery signing, and poor packaging, among oth-
ers.

The cost of errors noticed by a downstream user is, there-

fore, not entirely limited to the warehousing operations since
one-percent of errors can easily be traced to upstream defects
that result in additional expensing for suppliers on the order
of 10- to 30-percent. This involves far more than just the
warehousing re-picking costs and can include customer ser-
vice authorizations, credit note issuing, accounts receivable
delays, stock record corrections, transport return costs, and
redelivery expensing. Not captured in the bottom-line figures,
of course, is the hit to a warehouse or FC’s credibility and reli-
ability, but which could directly result in less income and rev-
enue in the future.

Accuracy throughout all warehouse activities, then, is

paramount in not only ensuring customer satisfaction, but in
also reducing non-value added costs (here, read: the staffing
of a quality assurance or quality control department).

OPTIMIZING FLOW

Having looked at each interconnected activity in the ware-

house, managers must next consider how to make sure that
the operation takes place in an efficient and effective way
wherein all of the “separate” internal and external activities
flow well together.

In order to briefly assess flow within and across a ware-

house, then, supervisors should:

• Check the correct product handling group data and ve-

locity throughput principles
• Check the levels of stock holding
• Minimize travel duration and length in order to save time
and resources
 • Check the trade-off between manual labor and mechani-
cal handling as measured by cost and time
• Assess the impact of operational requirements and real-
time paperwork requirements
• Check the trade-off needed between speed of access and
the ute of available space by assessing the labor and
equipment requirements alongside the costs and key per-
formance indicators (KPIs) that ensure maximum cus-
tomer satisfaction
• Allow for adequate stock control, security, and quality
compliance when planning and simulating a ‘new’ ware-
house layout, taking care to account for any and all gov-
ernmental regulations

OPERATIONAL CHALLENGES

A recent survey carried out by Intermec noted that nearly

3,000 hours per year were lost in warehouses and DCs due to
inefficient processes. What’s more, and when asked to identify
such waste, 80-percent of managers found that inventory con-
trol accounted for some 53-percent of their non-value added
expenses followed by picking at 47-percent and stow at 45-
percent.

Couple this with the average cost of a single error, or approx-

imately 50USD per order, and the pressure on the warehouse
manager increases significantly. One surprising fact that came
out of the survey, but which must be corrected for going for-
ward, then, was that one in six managers do not review their
workflow processes until they receive a customer complaint.
MAIN CHALLENGES
Despite quality being one of the primary drivers of ware-
house inefficiencies, delays, critical pull-time misses, and the
like, there are still others (as seen below in Figure 2.3) that the
FC manager must account for by creating contingency plans or
taking other preventive measures.

Source: Adapted from Richards, G., A complete Guide to Improving Efficiency and Minimizing Costs in the
Modern Warehouse, London, Kogan, 2018

Pressure to reduce operating costs

Companies in the low-cost leadership space are increasing

targeting their logistics operations as a means in which to cut
expenses. In order to remain of value to such clients, then,
warehouse leaders must avoid sacrificing customer service
while simultaneously building the case that their specialized
skills or facilities are both affordable and appreciated by end
users.

Achieving the perfect order

 A new much sought-after KPI is that of the perfect order
metric, which is when a product is delivered on time (i.e., at
the exact time requested by the customer), in full (i.e., in the
correct number and type of product originally ordered by the
customer), in perfect condition (i.e., with no quality issues),
and accompanied by the correct paperwork (i.e., accurate de-
livery notes, invoices, customs documentation, or bill of lad-
ing). This metric is a hybrid of sorts as it not only provides all
those party to the fulfillment process with a single gold stan-
dard in which to strive, but also proves a means for 3PLs to
take advantage of the competition.

Shorter order lead times and stock availability

Another challenging metric is that of order lead time or the

duration from order request through to product receipt. This
KPI is both a threat and opportunity for e-commerce FCs since
online consumers are likely to choose the quickest delivery
method when all other metrics, such as quality and cost, are
held equal.

Omnichannel fulfillment

When manufacturers look to market and sell their goods,

they are doing so, increasingly, via all channels available to
them. This means that FCs must account for various delivery
types and order receipt notifications, which can include direct,
single-item requests to the end user or via a collection point.
Multi-SKU orders, B2B, and bulk orders to retail DCs will also
have to be readied at the same time as B2C items with no im-
pact to quality to either channel type. Each bespoke request
will also have its own pick procedure, critical pull time, and
delivery method.

Smaller, more frequent orders

Manufacturers and retailers are continually striving to re-

duce inventory while retail stores are looking to increase floor
sales space. In the case of the latter, showrooms are looking to
reduce the amount of inventory held in stockrooms by imple-
menting just-in-time processes, steering customers toward
Internet marketplaces, and implementing efficient consumer
response (ECR) and quick response (QR). The result, of course,
is smaller, faster, and more frequent orders. This, again, ne-
cessitates changes in warehouse operations with a move away
from full-pallet picking to carton and individual-item pulls.

Greater fluctuations in demand

The days of predictable sales are long gone with consumers,

rather than manufacturers, flexing their demand-side muscles
in the marketplace. Seasonality remains a key factor in key
market sectors such as fashion while pre- and post-Peak sales
are now stretching warehouse resources to the limit as the
rush to get products to stores intensifies. Retailers are also
having to cope with ‘Black Friday’, ‘Cyber Monday’, ‘Singles
Day’, Chinese New Year, and many other holidays, which have
become synonymous with heavily discounted sales and large
volume throughput. FCs must now prove their ability to ramp
up resources during the Peak season while seamlessly return-
ing to a leaner operation during slower, quieter periods. Ware-
house staffing is but one example of how such spikes in de-
mand drive huge internal challenges with many FCs quadru-
pling their personnel numbers at various points throughout
the year.

Increases in stock-keeping units

The proliferation of product lines gives the consumer

choice, but proves a major challenge for warehouse managers
in terms of having sufficient, cost-effective pick locations.
Once operators have to pick items at height, productivity rates
reduce significantly.

Retailers continue to seek differentiation and as a result are

continually looking to introduce product variants; not only in
terms of the product itself, but also in pack size, the type of
packaging, labelling, and product combinations. Retailers are
also introducing more of their own brand labels to provide
consumers with even greater choice.
This has led to a number of companies introducing post-
ponement into their warehouse operations. This entails hold-
ing basic product stock and only adding extra inventory once
orders have been received. Kitting, or stocking base products
alongside additional parts or service options on the warehouse
floor, are but one of these space-saving features.

Labor costs and availability

During periods of high employment, many countries are

seeing hourly rates steadily increase due to the fact that a
number of nations have an ageing workforce. Thus, and be-
cause it is becoming increasingly more difficult to source ex-
perienced warehouse operatives, warehouse managers need
to come up with ways to attract new staff.

Many workforces have been supplemented with the intro-

duction of staff from abroad. In these circumstances, 3PLs
need to look at employing bilingual supervisors and contem-
plate the use of new technology such as voice-directed pro-
cesses. There is also the added challenge of health and safety
so as to ensure that international staff are able to read and un-
derstand instructions, which are not in their native tongue.

CONCLUSION

When considering the distribution and warehouse man-

agement space, it’s easy to become overwhelmed. And while
this chapter covered quite a few, there are a seemingly infinite
number of uncertainties and unknowns that can arise when
trying to cut costs, speed throughput, and improve quality
control processes—all at the same time.

This is a good reminder that efficient and effective ware-

housing is no longer static, but, instead, dynamic, flexible, and
responsive to customers demands. Warehouse managers and
team leads need to start with the end in mind, then, in order to
determine what results they hope to achieve as defined
through the eyes of the consumer.
 These metrics should not only include perfect order rates,
but also internally focused KPIs targeted at minimizing quality
escapes from within the FC. What’s more, site leads and ware-
housing managers need to consider velocity and how best to
optimize flow by holding upstream and downstream partners
accountable to deadlines, critical pull-times, and other poten-
tial misses that can reflect badly on the entire supply chain
network.

Knowing that speed and cost are key considerations for

shoppers, managers can return to the start of the chapter and
determine which type of fulfillment center, cross-dock, or re-
verse logistics center they want to implement. This design
phase goes beyond simply selecting how, where, when, and in
what quantities goods will flow, of course, and includes gener-
ating job descriptions, training programs, and safety protocols
that fit with the building type and layout.

On this latter concern, warehouse layouts should no longer

be fixed based on the current needs of the customer, but,
rather, easily reconfigurable so that if—or when—consumer
shopping behavior changes, the FC can become a cross-dock
or similarly value-added stop within the last mile of delivery.

Once a warehouse manager has selected for facility type and

layout, the next operational challenge becomes optimizing
processes and accelerating throughput. And while it’s unlikely
that shoppers will shift away from low-volume, high-frequency
deliveries anytime soon, GMs would be wise to instill value-
added processes that are always focused on sustainability, cost
reduction, employee empowerment, and waste removal.

One process that has—and continues to—garner a great deal

of attention is pick since all process steps leading up to final
delivery stop there. In other words, if a product was not cor-
rectly received into an FC, it will lack a digital footprint and be
virtually impossible to find in the warehouse. Not only does
this create headaches for associates, but it also means missed
shipments and wasted inventory.
 Warehouse management needs to go beyond merely cor-
recting for such issues by focusing on preventative, people
positive training procedures. Other issues in the personnel
space include aging workforces, last-minute staffing require-
ments, skill gaps, and an overall disinterest in pursuing long-
term employment within the FC space.

Couple this with the prevailing belief that automation will

save warehouse managers from having to solve such acute or-
ganizational health issues and the warehousing space be-
comes even more volatile. In other words, augmented reality,
virtual reality, the Internet of Things, and other Industry 4.0
opportunities are not cure-alls for short-term goals that do not
orient—or steer—an FC toward lasting productivity built on
flexible processes that ensure well-trained personnel deliver a
pack on time, every time.

Drones, self-driving tugs, conveyance, and robotics are only

going to speed processes within an FC—regardless of whether
that site is optimized around type and layout.

This is precisely why—and in the next chapter—general

managers and team leads need to get serious about people
management for without personnel the FC would fail miser-
ably still.
CHAPTER 2 - People Management

A
lthough automation will continue to play an increas-
ing role in warehouse operations in the more imme-
diate future, there will still be a need for high-skilled
“knowledge workers”. Consider, and while more and more
robots move products between floors and miles upon miles of
conveyance ferry totes across different departments, human
oversight will still be required to troubleshoot those instances
where operations or mechanisms breakdown.

Conveyance and robotics will certainly help max-out and

cube-out warehouse space, but this will require planning, im-
plementation, execution, and continuous improvement as can
only be rendered by seasoned logistics leads and managers.
What’s more, and because radio frequency, barcode, and line-
of-sight sensors will need to be placed strategically throughout
the warehouse to ensure there is no break in communication
with automated pieces of equipment, there will also need to be
a well-staffed command and control center acting like the nu-
cleus of the overall operation and coordinating with upstream
and downstream clients.

Managers and leaders as well as IT specialists and equip-

ment service engineers will be in high demand in such fulfill-
ment centers (FCs) as will skilled who can maneuver goods-to-
picker systems during critical pull times (CPTs). Still, vision-
checking systems and drone delivered recordings will take the
place of even the most well-trained human eye, which will re-
sult in fewer accidents and mistakes given the decrease in
human floor time. Highly-specialized staff will be needed to
conduct re-packing, re-labelling, stenciling, kimballing, kit-
ting, and other final assembly procedures.

Viz., Amazon argues that even though it is introducing au-

tomation into its warehouses it is still increasing its staffing
levels as consumer demand increases, but in very niche ware-
house operations.
Human (resources) management

Many post-industrial sectors are facing workforce manage-

ment challenges in the form of identifying, attracting, and re-
taining effective supervisors and frontline managers.

What’s more, these seem industries, which include ware-

housing, trucking, and manufacturing, among others, are also
having to confront the fact that they are losing experienced
personnel as employees age and naturally leave the workforce.
Backfilling such in-demand positions is becoming increasing-
ly arduous since populations are shrinking the world over and
those closest to wheel-and-spoke networks have little desire to
work in FCs.

Thus, many human resources (HR) managers are looking

abroad to staff critical positions, but which places a still
greater demand on hiring managers to promote effective team
leads that can quickly and efficiently train those who may or
may not speak a common language. There are still more bur-
dens on hiring managers who have to vet potential candidates,
negotiate employment contracts, and ensure there are no po-
tential legal issues with age, race, creed, color, or national ori-
gin.

Another root cause issue behind staffing issues is the FC or

logistics network itself, which is seen, generally, as uncom-
fortable, high-speed, and unsafe. Overcoming such predispo-
sitions means hosting open-door days or otherwise inviting
the local community and council members to see why ware-
housing can revitalize an area. Additionally, HR managers may
wish to host hiring invites or advertise incentive schemes for
part-time employment around known seasonal peaks.

Consider, that when local personnel know that a site offers

flexible hours, recognition for a job well done, and a clean, safe
working environment along with adequate training and ongo-
ing communication, they are more likely to seek long-term
employment at an FC and, in so doing, strengthen that site as a
go-to distribution node.
 HR personnel, in partnership with site leads, will need to
post health and safety compliance legislation in breakrooms
as well as enforce any changes so as to ensure staff wellness.

Management, of course, plays a significant factor in whether

a site will have a high rate of turnover. What’s more, frontline
supervisors have a direct impact on an employee’s willingness
to show up on time, take appropriate breaks, stay with a firm,
and seek promotion from within.

While all of these changes have shaped the way FCs and
warehouses hire, train, and develop managers, the return on
investment (ROI) cannot go unstated since a knowledgeable
and reliable workforce is, itself, a capital asset for any compa-
ny.

All of this starts, however, with well-educated supervisors

with access to better training programs that include continu-
ous personnel development initiatives. To be clear, supervi-
sors are those warehouse managers that are frequently found
behind their computer screens evaluating reports and plan-
ning future activities.

Warehouse supervisors, therefore, need strategic-level su-

pervisory skills as well as an ability to interact with their as-
sociates in a tactful manner on the shop floor. They also need
to become familiar with external supplier and customer pro-
cedures, which affect internal warehouse operations.

Although warehouses can attempt to offset low staff reten-

tion rates with high-tech equipment and software, the site is
likely to struggle given that effective management is still a pre-
requisite in formulating operational plans and projections. In
other words, and even when robotic or RFID systems are inte-
grated within an FC, unmotivated personnel can still cause
routine failures due to training or a belief that a supervisor
simply does not care about the associates writ large.

Getting the best from warehouse employees, then, is both a

threat as well as a potential competitive advantage for those
firms that wish to reduce absenteeism and turnover rates via
smart hiring schemes coupled with long-term training pro-
grams. Consider, then, that the cost of absenteeism runs well
over the average three- to four-percent per annum since those
same sites also suffer from relatively low rates of productivity
as well as higher operating costs because employees are sim-
ply “fed up”.

In order to reverse this breakdown in personnel manage-

ment and, in so doing, create a virtuous cycle where employ-
ees want to show up for themselves, their team, and their site,
it is imperative that managers look, first, to their current com-
pany culture.

Culture

Culture, be it within a company or across an entire conti-

nent, is merely the “way things are done around here”. Alter-
natively, this concept can be defined as an accepted set of
norms, procedures, and behaviors that are implicitly defined
by those who already “fit in”. New employees, then, are often
eager to demonstrate their willingness to learn and quickly
adopt mannerisms or ideas that will ensure their long-term
survival within an FC.

Not all warehouse cultures will meet the needs of its em-
ployees at all times, but taking an active approach toward
building an empowered workplace (as noted in Table 10.1 as a
“Friendly” cultural climate) will pay dividends when calling on
workers to contribute their knowledge toward solving seasonal
or more long-term issues out on the shop floor.
Source: Adapted from Emmett, S., Excellence in Warehouse Management: How to Minimise Costs and Maximise
Value, Wiley, 2005

Additionally, and as seen below, workplace culture can also

stimulate or stress employees, which is why it is of paramount
importance that managers monitor both quantitative and
qualitative metrics as can only be measured through engage-
ment surveys and the like.
Source: Adapted from Thomas, M. J. W., Traiing and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017

Temporary workers should not be seen as temporary

Although there are a number of different types of positions

within a warehouse (as seen in Table 10.2, below), many HR
managers and site leads take a very traditional approach to
staffing, which is to say in a hierarchical manner.

In other words, most FCs will only staff or hire associates

based on forecasted projections that account for short-term
periods of high-demand based on more long-term cyclical
variations. Regardless, no distribution operation can afford to
waste money on human or physical assets that are not being
fully utilized throughout the entirety of a shift, day, week,
month, or year.

In order to level load drivers as well as avoid maintaining

too many assets in the form of trucks and trailers, companies
must analyze their performance as well as project what they
believe their needs to be in the more immediate future so as to
staff accordingly. Put another way, a distribution operation
should routinely have requests out for temporary labor since
the opposite, or when associates are waiting for tasks or as-
signments, is an indicator that an FC has too many assets in
the first place.

The objective, then, must be to optimize the operation’s core

human and physical assets by offsetting peaks in demand via
partnerships with hiring agencies, independent trucking con-
tractors, and facilities that experience a different peak de-
mand cycle. Other situations could also lead to short-term hir-
ing such as staff holidays, illness, or vehicle and handling
equipment breakdown. Advanced contingency problem will
prevent these unpredictable, temporary crises from becoming
more systemic breakdowns within an FC.

The following section is just one approach that companies

have taken in order to hire temporary drivers, but which can
be modified, to great success, when hiring for any type of
warehouse associate (as seen below in table 10.2).

Source: Adapted from Emmett, S., Excellence in Warehouse Management: How to Minimise Costs and Maximise
Value, Wiley, 2005
Source: Adapted from Emmett, S., Excellence in Warehouse Management: How to Minimise Costs and Maximise
Value, Wiley, 2005

Hiring temporary staff

Temporary drivers attract a great deal of criticism for vari-

ous reasons, but very often many of the situations they are
held accountable for are not of their doing. Too often, harassed
managers telephone a temporary staffing agency late in the
day and request a driver without having conducted their own
due diligence in vetting a potential driver. In other words,
many managers simply look for the driver offering the lowest
rate, but who, ultimately, lacks the professional or personal
skills needed to get the job done.

The following, then, is a checklist that can help the harried

site lead find a more suitable candidate when under a time
constraint:

1. Set aside time to investigate the temporary staffing

agencies in your area. Don’t just select those with the low-
est rates. In the UK, for example, many reputable agencies
will be members of the Federation of Recruitment and Em-
ployment Services (FRES).
2. Check with other companies in the area and see who
they recommend and why.

3. Key points to be established with any potential agency

are:
• How are drivers selected?
• How often are driving licenses checked?
• Are the drivers tested or evaluated based on relevant
legislation and their compliance to any necessary laws?
• Are drivers’ employment histories and references
checked?
• Are drivers full-time employees of the agency?
• Does the agency have all the relevant insurances such
as employer’s and public liability cover?
• What insurance do agencies have in which to cover
damage caused by their drivers’ negligence?
• What training does the agency provide for its employ-
ees?
• Does the agency have 24-hour telephone coverage or a
1-800 customer service line?
• How will the agency provide information about the
hours of work the driver has completed before undertak-
ing your work?
• When was the last weekly or daily rest period?
• How many driving hours have already been performed
that day, week, or month?

4. Having selected an agency, try to establish a good work-

ing relationship with them. Invite their leaders to your
premises so that they can gain a better understanding of
your specific business needs. If the agency is of the right
caliber, they should suggest this themselves.

5. Agree upon hourly, weekly, or daily rates as per your

business needs as this will avoid last-minute contractual
negotiations that could result in not only rush fees, but also
the loss of goodwill between partner firms.
6. Tell the agency exactly what is expected from any and
all drivers that they send. Each driver should be to a stan-
dard that has been previously agreed upon. Ensure that
any who do not meet this standard are rejected. Though
this is sometimes difficult to do given that the repercus-
sions include missing a delivery window or letting a cus-
tomer order go unfulfilled, enforcing and maintaining high
standards will prevent not only the agency from sending
still more drivers that do not meet spec, but also protect
your company’s image and brand. That said, agree to a set
of charges or fees that must be paid by the firm should a
driver not be capable of performing optimally before sign-
ing on with a staffing agency.

7. Supply the agency with all relevant health and safety

information in advance so as to allow them time to brief
their drivers. Include any specific rules about your premis-
es such as smoking policies or personal protective equip-
ment that may be required at the time of their employment.

8. If your delivery drivers have regular delivery points, try

to compile a library or folder of maps and directions that
you can quickly hand out to temporary drivers. This will
not only help temporary associates get up to speed, but
also ensure there is no miscommunication around expec-
tations of direct, efficient point-to-point deliveries.

9. If security is important, then insist that temporary driv-

ers are provided with identity cards that display the pho-
to before they can be placed on the call roster. Obtain the
name of the driver being assigned to your work and ensure
that your staff are made aware of whom to expect.

10. In large operations, some agency staff will become al-

most permanent fixtures due to their continued presence
covering more permanent workers during Peak or for re-
quested time off. Make an effort, then, to include the
agency in any information bulletins that are circulated
to drivers. This will be especially helpful in the case of
health and safety information or quality assurance and
control measures.
 Again, and while the above list has concentrated on tempo-
rary drivers, it can be easily modified so as to cover other tem-
porary staffing needs. Depending on your facility or FC type,
do take care to ensure all certifications, such as those for fork-
lifts, are up-to-date and checked by the staffing firm before
agreeing to accept a temp hire.

Lastly, and while this list is a good place to start when look-
ing to hire an independent contractor or driver, it is not at all
comprehensive and, so, any agencies that cannot give satisfac-
tory answers to the above should be avoided at all costs.

Training temporary workers

Temporary labor is expensive not only in terms of hourly

rates charged, but also on account of the high costs associated
with training, supervising, and coaching temporary hires so
that they can achieve passable productivity standards. Where
these personnel may initially be seen as a stopgap measure or
interim fill, it is important to form relationships with local
agencies that can provide you with turnkey candidates based
on their understanding of your business needs given their past
participation in assessing your site’s seasonal and cyclical
staffing needs.

CONCLUSION
 Looking back over the previous chapter, a few themes—or
patterns—continue to emerge.

Chief among them is the fact that despite warehouse man-

agers and GMs recognizing problems within their hiring and
staffing practices, little has been done across the entire logis-
tics industry in order to correct for the most glaring shortfall
of all: a veritable PR nightmare around what it means to work
in heavy industry.

To summarize, working in an FC often carries the stigma

that whoever would accept such a job must not be very bright,
ambitious, or hardworking.

Nothing, however, could be further from the truth. Consider,

these individuals routinely log hundreds of miles of walking
and picking during Peak season, adeptly maneuver forklifts
and trucks within and around narrow aisles, seek opportuni-
ties to improve processes as they work, and do so all in loud,
noisy, and otherwise dangerous work environments.

The problem—as mentioned throughout the chapter—then,

is twofold: rebranding warehouse labor and putting in place
long-term training and development programs that reduce
worker turnover.

In solving for the first of these, it was recommended that HR

personnel build partnerships with local educational facilities
and campuses to recruit individuals based on what actually
happens within the four walls of an FC. Additionally, the staff
also needs to work alongside their operational counterparts to
determine what skills, abilities, and attributes a manager
needs filled out on the floor.

From here, this same team needs to look out to the greater
community in order to partner with temporary staffing agen-
cies in the event that they cannot fulfill departmental needs
leading up to—and during—Peak season.
 On this note—and as mentioned in the preceding chapter—
temporary laborers should not be treated as a disposable re-
source; instead, as a member of an extended family. Drivers,
pickers, and stowers alike should all be previously vetted and
locked in at rates that are not inflated and acceptable as per
the site’s annual budgetary allowance.

In tackling the second problem, team leads and operational

managers need to ensure safe operational environments as
well as adequate training—in the primary and secondary lan-
guages of all workers—so as to avoid unnecessary slips, trips,
and near misses.

Training also needs to encapsulate professional develop-

ment opportunities so as to avoid brain or skill drain when
workers leave because they no longer feel they have the ability
for upward mobility.

Warehouse employees should no longer be made to feel like

automatons in the workplace either. Consider, then, creating
labor management systems that convert previously low-skilled
associates into knowledge workers by training them on how to
operate autonomous mobile robots, smart forklifts, drones, or
other Industry 4.0 equipment.

Not only will this help encourage individuals to stay the

course and continue working within an FC, but it will also pre-
pare them ahead of the coming tsunami that will be au-
tomation within the warehouse.

On this note, we turn to workforce training within the cur-

rent operational environment with a forward look to what—
quite possibly—lies on the horizon.
CHAPTER 3 - Workforce Training

F
ast-paced fulfillment processes are rarely predictable
in terms of volume and demand. Thus, it is imperative
that managers adopt smart training procedures in or-
der to quickly onboard new or temporary associates so as to
smooth their operational peaks and troughs as well as main-
tain maximum efficiency across the entirety of the fulfillment
center (FC) network.

A comprehensive and ongoing training program, then, is

essential for both managers and supervisors. The warehouse
should not be seen as a necessary evil for retailers, but, in-
stead, viewed as an essential part of the supply chain that adds
value via associates who are able to perform kitting or similar
activities closest to the end user.

To start, managers need to ensure that all staff receive an

induction. A simple process flow map showing the end-to-end
supply chain and how each step impacts the final customer
will engage warehouse staff and help them take ownership
over the entire process.

Secondly, managers would be well-advised to conduct a

training needs analysis in order to identify which staff types
require specialized training. There are often areas where staff
need to be trained and these steps needs to be identified, codi-
fied, and standardized.

Effective training helps to engage employees at every stage

of their career and should be an ongoing process. Training
across disciplines not only provides the operator with a sense
of progression, but also builds flexibility into the operation.

From a productivity perspective as well as one of safety, all

staff operating mechanical handling equipment must be
trained on each individual piece of equipment and obtain a
license from the appropriate issuing authority. Moreover, all
personnel must also be shown how to lift heavy items without
causing injury as back injuries often have lingering conse-
quences for both the associate and the firm given that the for-
mer may seek legal recourse or long-term compensation.

Some activities are periodic rather than a direct daily func-

tion. These include training, which can be anticipated and
prepared for by considering changes in the operational envi-
ronment and which should be scheduled at times of lower
throughput so as to optimize any and all idle time. Such activi-
ties need to be documented as well as accounted for when set-
ting resource levels just as an FC would during a periodic in-
ventory counting exercise, which is a good example of a pre-
dictable activity that follows a slightly different, but similar, set
of rules.

As a case in point, consider a survey conducted by Honey-

well in 2015 and which identified that nearly 25 percent of all
FC workers around the world do not speak the local language.
This means that, and going forward, managers and site leads
will need to account for an increased use in training and tech-
nology so as to support multi-lingual associates in both a safe
and effective manner.

Training: Theory

Though there are a number of different formal training con-

structs in which an FC can use in order to ensure trainees and
new hires receive the knowledge, skills, and abilities required
to work in a warehouse setting, no two programs will be exact-
ly alike. One general approach, however, has stood the test of
time and is known as on-the-job (OJT) training and can be ei-
ther formal or informal education-driven interventions that
take place during normal working hours when certain situa-
tions present themselves.

Another key consideration in designing a training program

is the ratio of technical to non-technical skills required. In
other words, cognitive and social abilities that complement the
technical skills of workers and contribute to safe and efficient
performance in high-risk industries should not go unnoticed.
These competencies include coaching new hires on situational
awareness, decision-making, task management, communica-
tion, and teamwork.

That said, awareness training, or developing an understand-

ing of the importance of non-technical skills within FCs, is also
important for personnel who need to appreciate the inner-
workings of finance, human relations, and IT, among others.

Internal training departments should also create a syllabus

or curriculum for new hires and trainees complete with ex-
pected outcomes, overall aims, and objectives of the program
as assessed periodically throughout the program. Checking for
competences, skills, and aptitude should occur both OJT as
well as in a more formal setting.

What’s too often forgotten, is the importance of training the

trainer. FCs, then, should consider their instruction delivery
techniques, which ought to complement a range of different
learning styles by describing, guiding, facilitating, coaching,
and assessing new employees based on their own individual-
ized needs. Trainers should also know, and communicate their
instructional objectives or the desired outcomes of the train-
ing.

In keeping with the meta-level of training, FC programs also

need to be designed, implemented, and evaluated by site leads
so as to ensure the incorporation of best practices and key op-
erational concepts. Thus, and prior to conducting any training
program a briefing should be readied and delivered to new
personnel so that they are primed for learning. A briefing typi-
cally consists of the objectives of the training session, revisits
core enabling knowledge, and sets the expectations for per-
formance during training, all of which should be facilitated by
a certified practitioner.

On this note, and even for non-technical skills training pro-

grams, trainers should always assist new personnel in the
learning process by discussing and reflecting on performance
while also providing guidance with respect to optimal and
sub-optimal outcomes. This is most notably conducted via
coaching, which is the process of observing an individual OJT
and providing immediate feedback.

Lastly, a debriefing activity should occur in which trainees

are able to critically reflect on aspects of good and bad per-
formance alongside their instructor who provides specific
feedback on individual performance. This is, of course, fol-
lowed by a formal evaluation and which should have resulted
in some behavioral change (as discussed, below, in tables 6.5
and 3.3, respectively)
 Of note, and as seen in table 3.1, below, all employees must
demonstrate a level of proficiency in all warehouse operations
so that they can better appreciate what operations and tasks
they support off the shop floor. In other words, and in training
such personnel, who may or may not be work in an office envi-
ronment, on the skills and safety standards required by em-
ployees, they will better be able to support those who have
gained a level of mastery in key operational departments.
Checklist for Putting Adult Learning Theory into Practice

Principles of Adult Learning

✓ The reason for learning is explained to trainees prior to

them investing energy into the learning process.

✓ Trainer adopts an approach of guidance and facilitation,

such that trainees can self-direct their own learning.

✓ There has been an analysis of the experience trainees

bring to the training program and on which new knowledge
and skills are built.

✓ Trainees recognize a need for developing new knowledge

and skills.

✓ The training program focuses on new abilities that will

enable enhanced job performance in the real world or be-
yond the FC.
✓ The training program is designed with intrinsic motiva-
tors in mind.

Individual Learning Styles

✓ The training program takes into consideration the pre-

ferred learning style of trainees.

Domains of Learning

✓ Each element of the training program is appropriate to

the domain of learning outcome. For instance, knowledge is
developed through reading, seminars, and workshops so
that skills are developed through simulation and OJT with
sufficient time spent on critical reflection via a facilitated
discussion.

Reflective Practice

✓ The training program promotes non-technical skill de-

velopment through processes of reflective practice along-
side traditional skills-based training approaches such as
part-task rehearsal.

✓ The training program uses authentic scenarios to create

realistic environments for professional engagement pur-
poses.

✓ The training program promotes critical reflection by

trainees on their own performance and that of the team.

Constructivism

✓ The training program promotes non-technical skill de-

velopment as a process of learning in a social and cultural
context.
✓ The training program makes explicit the underlying as-
sumptions of attitudes and cultural values that contribute
to safe and efficient operations.

Stages of Instruction

✓ The training program is designed in a manner that en-

sures learning is facilitated through

✓ appropriate levels of task complexity and cognitive load.

✓ Each element in the training program adopts a sequence

of instruction that includes: (1) the activation of a trainee’s
prior knowledge, skills, and experience followed by the (2)
demonstration of new skills; and(3) the trainee’s applica-
tion of those skills and, lastly, (4) integration of those skills
into real-world activities.

Elaboration Theory

✓ The training program first contextualizes new knowl-

edge, skills, and attitudes before taking a more granular
approach during the hands-on or demonstrative portion of
the lesson or activity.

✓ Once the knowledge, skills, and abilities have been de-

veloped in detail, this learning is then re-generalized
across the larger context of day-to-day work across an en-
tire network of FCs.

Cognitive Load Theory

✓ The training program is designed to manage cognitive

load and does not ask trainees to demonstrate complex
skills without first developing the underlying enabling
knowledge and constituent understanding of the task at
hand.
✓ Strategies such as using “worked examples” in case-
based training modes are integrated into the sequence of
training.

Modelling Behaviour

✓ The training program provides exposure to examples of

good and poor non-technical performance such that ap-
propriate can be observed, modelled, and eventually
adopted.

Situated Learning

✓ The training program is designed to enable learning to

take place in authentic contexts, including the social and
cultural contexts of the real-world work environment.

✓ The training program makes explicit the tacit cognitive

strategies used by experts in managing ill-defined real-
world problems.

Instructional Use of Error

✓ The training program adopts an approach in which error

is expected to occur and is used to enhance learning by
highlighting sub-optimal strategies.

Competency-Based Training

✓ The training program specifies a taxonomy of competen-

cies to be developed throughout the training diet so that
these competencies are developed prior to designing the
curriculum.

✓ The training program adopts criterion-referenced as-

sessments.
 ✓ The training program is learner-centric and focuses on
individual needs and competency development and as dis-
cussed, below, in table 3.2.

✓ The training program allows flexibility in the time spent

on developing competencies, and training does not finish
until competency is attained.

Source: Adapted from Thomas, M. J. W., Traiing and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017

Training: Health and safety

Health and safety are nonnegotiable aspects of any busi-

ness, but especially those that are already operating in low-
margin or customer-facing industries. That said, chief execu-
tives and directors need to take a top-down approach toward
ensuring compliance throughout their organizations.

Despite numerous surveys that routinely rank safety as the

number one concern for managers in warehouse operations,
there are steps that supervisors and shop floor leaders can
take to engineer out risks on behalf of their associates by re-
moving potential hazards, improving processes, and otherwise
standardizing workflows.

That said, is every employee’s responsibility to partner with

their employer to ensure they have received adequate health
and safety training. This should not only take place on day
one, but be should also be supplemented when one-off risks
are identified as well as refreshed periodically to avoid gaps in
compliance.

While warehouses and FCs are inherently dangerous and

accidents will occur, there are a number of strategies that site
leads can implement toward reducing or removing hazards.
While ensuring a safe operational environment may seem like
an expensive, non-value added endeavor to some supply chain
operators, the cost of not providing such measures is poten-
tially more damaging both financially as well as in terms of
brand marketing if, or when, an accident occurs.
Source: Adapted from Thomas, M. J. W., Traiing and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017

Conversely, and especially in the UK where courts are being

directed to punish near misses or accidents waiting to happen,
executives are dedicating more time and resources to ensur-
ing that occupational health and wellness standards are being
upheld.

Main causes of injuries in the warehouse (www.HSEgov.uk)

Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017
 If the threat of fiscal recourse proves insufficient, the loss in
productivity due to near misses and non-fatal injuries should
as was the case in the UK from 2015 and 2016 when 4,441 in-
juries resulted in over seven day’s absence per each safety vio-
lation.

Contrast that with findings in the US where 11 people lost

their lives due to warehouse-related incidents in 2015 and
where nearly five-percent of all those employed in an FC will
incur an injury (e.g., overexertion, contact with equipment,
fills, trips, transport related, harmful substance exposure, et
al) and the cost of ignoring safety considerations skyrockets.

The Occupational Safety and Health Administration (OSHA)

cites still more safety-related issues such as repetitive motion
injuries, unsafe forklift operations, improper stacking proce-
dures, inadequate use of personal protective equipment (PPE),
lockout/tagout failures, and inadequate fire safety provisions,
among others (and as seen, below, in figure 15.1).

Improving safety starts with recording and analyzing in-

juries within an FC and which is required by OSHA in the for of
the total recordable incidence rate. OSHA injuries and illness-
es include all work-related deaths, illnesses, and injuries
which result in a loss of consciousness, restriction of work or
motion, permanent transfer to another job within the compa-
ny, or any incident that requires some type of medical treat-
ment other than first-aid treatment. Alternatively, some sites
may elect to measure and monitor the number of days since a
reportable incident occurred.

A written health and safety policy is not only a step in the

right direction when improving workplace standards, but also
required in the UK when a business has more than five total
employees. This regulation, known as the Health and Safety at
Work Act, divides those responsible for employee wellbeing
into three categories, or: the employer (e.g., commitment to
training), the employee (e.g., open cooperation with the em-
ployer), and the manufacturer (e.g., verification that product is
fit for its intended purpose).
Risk assessments

In today’s atmosphere of increased litigation, there is added

pressure on managers to ensure the safety of their employees.
Supervisors have to take extra precautions when identifying
potential hazards where accidents could occur and put in
place solutions that reduce the risk of their occurrence.

A risk assessment can be broken down into five stages, or:

Step 1: Identify the hazards.

Step 2: Decide who might be harmed and how.
Step 3: Evaluate the risks and decide on precautions.
Step 4: Record and communicate your findings taking care
to implement them.
Step 5: Review your risk assessment regularly and update
any procedures as necessary.

When initially tackling a workplace hazard, first, investigate

measures that are already in place. Next, look to adopt and
implement industry-wide best practices by asking yourself
whether you and your team can engineer out the hazard alto-
gether? If not, how could you control the risks so that the po-
tential for harm is mitigated?

When controlling risks, then, apply the following principles,

if possible, and in this order:

• Try a less risky approach such as adopting a less haz-

ardous chemical
• Prevent access to the hazard by using guardrails, for in-
stance
• Organize work to reduce exposure to the hazard while
also incorporate visual signage throughout your site
• Issue PPE and have known points where employees can
don clothing, footwear, and goggles
• Provide welfare facilities, first-aid stations, and the like
and train employees on how to exit the building or shelter
in place by providing adequate training
 Improving health and safety does not have to cost a great
deal. For instance, placing a mirror on a dangerous blind cor-
ner to help prevent vehicle accidents is a low-cost measure
that could not only prevent harm to an associate, but avoid
costly downtime for retraining if, and when, an accident does
happen.

Consider, also, seeking feedback from associates and staff so

as to not only garner buy-in for new measures, but to also so-
licit new ideas toward preventing an accident in the workplace
from the grassroots level.

Record, analyze, monitor, and improve your risk assess-

ments regularly

The first step a site lead or operations manager should take

when looking to critically assess and remove risks within an
FC is to create a prioritized list of potential improvements as
sourced from employees. Tackle those that could result in
grievous injuries, but also go after “low hanging fruit” so that
associates buy into the changes you are seeking to make on
their behalf.

As an aside, and while sites should conduct regular risk as-

sessments of their own accord, inspections are another poten-
tial motivating factor for seeking to engineer out warehouse
dangers. Health and safety auditors will mostly certainly ac-
knowledge the efforts of businesses that are making an effort
so long as their initiatives are authentic and made to last.

Next, be sure to record all risks as well as contingency plans,

but keep it simple (e.g., tripped over a pallet, pallet 5S’d, staff
trained on location, and daily housekeeping checklists vali-
dated). A realistic get-well-plan or plan of action will not only
track misses or near misses, but also analyze such findings so
as to identify and reduce the likely of high frequency and high
risk events.
 Both long- and short-term fixes, such as training employees
or checking a dock during shift turnover, should be routinely
audited so as to ensure that control measures stay in place.
Assigning clear roles and responsibilities will also increase
accountability between supervisors and warehouse associates
so that when new risks are identified they can be handled in
an efficient, process-oriented manner.

This last step is critical since FCs regularly look to improve

their operations by using new equipment, processes, or pro-
cedures; all of which could lead to new hazards in the work-
place. It makes sense, then, to review a site’s critical risk ma-
trix at least once a quarter or after a significant incident so as
to guard against any complacency when it comes to operating
heavy machinery or using an unapproved substance.

As a final consideration, site leads and warehouse managers

should regularly walk the floor and investigate whether a site
needs a new design layout, especially if there is a known area
that is prone to incidents, crashes, or spills. In other words, a
well-thought-out FC will help to reduce accidents, especially
those involving vehicles and slips or trips. Points to consider
when thinking about design and layout include storage areas,
aisles, gangways, pedestrian routes (both inside and outside a
facility), stairs, ramps, and emergency escape routes. This
phase of the risk assessment should also take into considera-
tion the actual maintenance of equipment and the warehouse
itself.

Consider, by way of an example, the fact that racking tends

to be the largest structure within the warehouse, but also the
one least likely to see regular inspection. A significant hazard
within any warehouse is where improperly stored goods can
fall and injure staff. Carrying out these checks regularly, then,
could minimize such occurrences as well as double as oppor-
tunities to mine for Kaizen or lean-focused events.
Warehouse equipment legislation

There are two major pieces of legislation in the UK that re-

late directly to the operation of warehouse equipment, or: the
Provision and Use of Work Equipment Regulations (PUWER)
and the Lifting Operations and Lifting Equipment Regulations
(LOLER).

In both, which were codified in 1998, mechanical handling

and lifting equipment is classified as “work equipment” and
subject to the former, or PUWER. Warehouses that use such
equipment, then, must adhere to the following, or:

• the inspection and maintenance of equipment

• the provision of information, instruction, and training
for each type of equipment
• the marking of controls
• that mobile work equipment for carrying persons is suit-
able
• protection from rollovers
• facilities to prevent unauthorized operation
• the provision of lighting equipment where necessary
• the provision, where necessary, of devices to improve
vision

Finally, and with regard to lifting equipment used within the

warehouse, LOLER states that such aids must be inspected and
thoroughly examined:

• after installation and before first use

• every six months for those pieces of equipment that lift
an individual or cage
• every 12 months for all other equipment
• each time the equipment has been involved in an acci-
dent

Do note that inspections can only be performed by a certi-

fied individual or someone equally as competent and who has
been deemed sufficiently independent and impartial so as to
make objective decisions, especially following an incident. Se-
rious defects should be reported to the HSE and the item taken
out of service.

Personnel awareness

Most accidents are a result of people not being adequately

trained, associates not reporting possible hazards, or individ-
uals involved in near misses. Remember the Accident pyra-
mid, or:

• for every serious injury, there are 100 minor injuries

• for every 100 minor injuries, there are 1,000 near misses

Thus, it follows that investigating one near miss could pro-

vide managers with key insights into how best to:

• define the best way to carry out a job

• determine the right equipment to use
• know how to operate equipment
• know what dangers are associated with its use
• know what the safety precautions are
• clean equipment safely
• know how to report faulty equipment
• use the appropriate personal protective equipment

Managers should also note when associates involved in a

near miss had their last training and whether the module pro-
vided adequate instruction. Supervisor’s should also recall
their duty of care, which means that individuals who report to
them should be aware of all potential hazards in the workplace
and that risks have been assessed with appropriate fails safes
put in place.

Despite the increased use of automation and mechanical

handling equipment in FCs, however, there are still many po-
tential hazards inside a warehouse. The increased speed of
operations frequently results in new sets of hazards while si-
multaneously compounding the frequency with which more
standard accidents occur.

These, and as mentioned earlier, can be mitigated when

every member of a warehouse team takes ownership of his or
her site’s safety by participating in regular risk assessments.

Health and safety issues

While some of the most common health- and safety-related

issues are mentioned below, this is by no means an exhaustive
list and, therefore, warehouse team leads and managers are
strongly encouraged to seek professional counsel when look-
ing to improve their facility well into the future.

• sufficient lighting both inside and outside a facility

• the integrity and strength of the warehouse floor, which
should be level and able to handle critical point load so as
to avoid trips, slips, equipment imbalances, and the like
• vehicles and pedestrians should be separated both in-
side the FC and in the yard; ideally this will be achieved
through the use of physical barriers, but pedestrian walk-
ways should be clearly marked on the floor as a minimum
with vehicle and pedestrian lanes kept clear of obstructions
at all times
• tidy work areas where pallets are neatly stacked, waste
packaging and rubbish is placed in an appropriate area,
spillages are immediately cleared, and fire exits clearly
marked
• natural ventilation in any area where personnel work
and where exhaust ventilation can be installed over bat-
tery-charging areas
• suitable and sufficient toilet, washing, and rest facilities
must be available for use by all staff
• storage areas that account for any and all hazardous
chemicals, flammable materials, and high-value items and
which will allow management to better apply any special
regulations regarding the safe handling of such products
Equipment

• all equipment should be well maintained and fit for pur-

pose to include all mechanical handling equipment, lifting
straps or chains, conveyors, shrink-wrap machines, trail-
ers, yard-based equipment, and the like; each should also
have a scheduled maintenance scheme in place
• pallet racking should be suitable for product type and
should be audited on a regular basis with any necessary
repairs being carried out with a minimum of delay given
that pallet-racking collapses can be catastrophic; what’s
more, unstable pallets or loads on pallets should not be put
away before either the pallet itself is changed or the load is
made safe
• block stacking of pallets one on top of the other should
only be to a height relative to that of the strength of the pal-
let(s) at the bottom of the stack, but which will need to be
validated on a site-by-site basis
• site-specific safety equipment such as fire extinguishers,
sprinkler systems, alarm systems, emergency lighting, first
aid kits, eyewash stations, emergency showers, signage,
and PPE should all be in place if required and serviced
regularly

Personnel

• all personnel should receive regular health and safety

training with those operating specific machinery receiving
additional training or licensing
• best-in-class sites routinely have safety departments or
offices charged with not only monitoring appropriate con-
duct within the FC, but also performing high-risk activities
such as charging batteries or disposing of chemicals
• breaches of health and safety rules and regulations
should be dealt with through visible disciplinary action,
which, and in some cases, could result in dismissal
• best-in-class sites not only provide hearing and vision
checks, but routinely offer blood pressure screenings, gen-
eral lifestyle advice, and stress counselling so as to ensure
 optimal employee performance both at work and in the
home
• random drug screenings can also prevent injuries or, al-
ternatively, be used after an accident in order to determine
the root cause of the incident
• writing clear job descriptions and hiring to spec will also
reduce the likelihood for injury as potential new hires will
know, and adhere to, site expectations as regards their
conduct
• some high-value facilities may require security checks
so as to avoid shrinkage or theft and which should be
communicated to employees at the time of their onboard-
ing

Legislation and regulations

Many aspects of health and safety within the supply chain

environment are now subject to both national and in-
ternational regulations. Site leads are strongly encouraged,
then, to partner with their legal teams in order to plan activi-
ties in accordance with these provisions and to only partake in
relationships or partnerships that facilitate smooth, cross-
border traffic.

More up-to-date information can be found at http://

www.hse.gov.uk and elsewhere, depending on one’s geograph-
ical footprint and location.

As an aside, and in closing, security (here, read: both physi-

cal and virtual), human rights, and other sociopolitical factors
should also be accounted for by site leads when looking to ex-
tend their supply chain network. Some tactical measures to
help ensure vehicle, personnel, and FC surety may include,
but are not limited to, the following, or:

• vehicle immobilization and alarms

• a guide of dos and don’ts for drivers
• FC location, fencing, and gating as guarded by contract-
ed security personnel
 • closed circuit television
• satellite tracking and monitoring

TRAINING: 5S

The 5S concept that underpins lean thinking can also be ap-

plied to warehouse safety and surety as follows:

• The first S (Sort or Seiri or Clear out) concentrates on

removing any unnecessary items from the work area. This
can include obsolete or damaged stock, over tocks, defec-
tive equipment, broken pallets, and waste packaging,
among other issues. It can also refer to unnecessary
movement within the warehouse. For example, the intro-
duction of a cross aisle within the picking area will reduce
the amount of travel undertaken by the operators and, so,
should be avoided.

• The second S (Straighten or Seiton or Configure) focuses

on efficient and effective placement of items via clear la-
belling on the floor or in storage areas that can be easily
accessed by employees throughout their shift. Directional
signs in the warehouse are also important as regards safety
as they help to reduce the amount of time taken to find
items. The use of “shadow boards” for the location of
equipment is also a good idea (see figure below).

• The third S (Shine or Seiso or Clean) comes after you

have cleared the area of any unnecessary items and pro-
vided a new baseline expectation for what the warehouse
or department should look like after every shift. Associates
should also take this time to report any defective equip-
ment or make recommendations for improved end-of-day
checklists. What’s more, and when warehouses are tidy,
staff are better able to work quickly and effectively, which
improves not only the overall performance of the FC, but
also decreases employee turnover rates.

• The fourth S (Standardize or Seiketsu or Conform) is all

about creating standards for each work area. Walking
 through each process with the appropriate staff should re-
sult in standardized operating procedures as well as poten-
tial best practices (e.g., visual aids, multilingual cue cards,
et al) so that employees can remain productive and safe
throughout the entirety of their shift.

• The fifth S (Sustain or Shitsuke or Custom) ensures con-

tinuous improvement. Staff are encouraged not to return to
previous work practices, but, rather, to take ownership of
their new environment and implement still more safety-
oriented procedures.

• The sixth S, which is becoming more common across

supply chain networks, stands for Safety and, so, is ar-
guably at the heart of the operation with all the other steps,
which need to be carried out in sequential order, support-
ing this need to have essential personnel leave and return
to an FC every single day.

5S methodology in the warehouse

(adopted from and courtesy of Cerosis Ltd)

Source: Adapted from Thomas, M. J. W., Traiing and Assessing Non-Technical Skills: A Practical Guide, CRC Press,
2017
 In summary, 5S/6S methodology is all about establishing an
orderly flow, eliminating waste, and organizing the workplace.
This type of outcome is only achievable, however, when em-
ployees play a key role in the process-oriented workshops and
take ownership over projects that have bear their safety and
wellness in mind.

Training: Quality and productivity

Optimizing warehouse logistics so that the right goods reach

the right customers at the right time has never been more cru-
cial amid the explosion of direct-to-consumer sales (among
other metrics, as seen below).

Source: Adapted from ZIH, Building the Smarter Warehouse: Warehousing 2020, 2016

And while warehouse executives are increasingly turning to

technology to ratchet up worker productivity given that pick-
ing alone accounts for some 70-percent of a facility’s operat-
ing costs, associates will continue to play a critical role toward
ensuring bespoke products reach customers on time, every
time.

Consider that today it takes an estimated 49.5 hours of

training for new staff to become fully optimized within an FC.
In a bid to cut that time to 36.2 hours, many are moving to
voice and screen directed inventory picking system over the
next five years.

The move to multi-modal picking, which augments voice

picking with screen-directed picking on mobile devices, be
they handheld and vehicle-mounted or wearables, is designed
to automate and expedite the workflow to accommodate order
volume surges in the supply chain, reduce pick and fill costs,
and enhance profit margins.

Still, and in closing, technology is no panacea for inefficient

warehouse designs or operations and, so, should be adopted
with the appropriate amount of caution on behalf of one’s
stakeholders, customers, and end users.
CONCLUSION

To conclude, and as should have been made undeniably evi-

dent throughout this past chapter, leaving training to chance is
a recipe for both short-term and long-term disaster.

In the more immediate future, this can manifest—to the em-

ployee at least—as indifference toward worker health, happi-
ness, well-being, and safety. As noted in chapter two, this can
also come across as management not having a plan for ware-
house succession or—worse—blatant disregard for the career
ambitions of their current staff.

Thus, and in the long-term, a poorly designed training pro-

gram can lead to problems with maintaining sufficient staffing
levels, injured personnel, low productivity, poor morale, quali-
ty escapes, and underutilized resources—just to name a few.

But how does a FC or distribution network create a new cul-

ture focused on safety, training, and associate empowerment?

As discussed, the answer lies in having a plan that includes

different training programs tailored to the specific needs of
the employee in question.

Consider, new employees or temp workers who are looking

to transition to full-time employment will need to be onboard-
ed and made aware of every type of function that occurs with
the FC regardless of whether they are out on the shop floor or
in the back office.

Alternatively, routine training will also need to be conducted

so that sites can remain operational in accordance with com-
pany, national, and international laws. This does not mean
that training has to be boring or outdated; just the opposite—it
should be designed so as to take advantage of any software or
technology that aids in its distribution while also being flexible
enough to meet the needs of the individual under review.
 This last point should also be taken seriously. Entire teams
and departments need to conduct regular audits and reviews
in order to ensure their training protocols are relevant, timely,
high-quality, and accurate in the information they are passing
along to employees and staff.

In terms of disseminating information from the training de-

partment to managers and other leaders, it’s important not to
forget to train the trainer. These individuals should have in
tune with the needs of the FC and willing to adapt as neces-
sary—incorporating such best practices as reflection and con-
structivism into their adult-focused training material.

The chapter also covered OJT and cross-training, which will

continue to be go-to techniques for training personnel given
the coming shift away from manual process to hybrid func-
tions that make use of automated guide vehicles, robots, and
more.

Lastly, the chapter looked at the role lean can play in train-
ing and making warehouses safer places in which associates
can build a lasting career. Focusing on 5S, employees will be
able to identify when tools or vehicles are out of place or when
a process is no longer performing in a standardized manner.

Being able to make note of any waste, unclean surfaces, or

tedious processes also means employees will be quicker to
identify unsafe working conditions that they can quickly esca-
late to a supervisor.

It is in this realm of continuously improving the workplace,

then, that the discussion turns toward expanding lean
throughout the entire warehouse, supply chain, and beyond.
CHAPTER 4 - Lean Warehousing

arehousing continues to evolve to meet the needs of

W just-in-time (JIT) supply chain networks by adding

value to both inbound and outbound operations
through increased throughput and storage options. But in or-
der to remain relevant in the increasingly dominant world of
e-commerce driven sales, fulfillment centers (FCs) must do so
in a low cost, flexible, and efficient manner.

One means in which to achieve this intended outcome is by

adopting lean management principles and philosophies to-
ward reducing the seven most common type of waste, or
muda, in warehousing.

Recently, an eighth type of waste has been included (here,

read: Skills) and which results in the nifty mnemonic ‘Tim
Woods’, which is as follows:

• Transport, or: the unnecessary movement of people,

products, information, and equipment (e.g., relocating
empty trailers or pallets)

• Inventory, or: maintaining deadwood or storing obsolete

products, equipment, and parts

• Motion, or: non-value added bending, turning, reaching,

and lifting

• Waiting, or: bottlenecks at pick locations

• Overproduction, or: holding too much inventory

• Overprocessing, or: unnecessary steps such as re-la-

belling or post-audit checks
 • Defects, or: time spent correcting errors such as miss-
picks

• Skills, or: under-utilizing capabilities, creativity, and

knowledge or delegating tasks to those with inadequate
training; the failure to multi-task staff and, therefore,
transfer them between processes at busy times

Lean thinking aims to have clean and streamlined opera-

tions through the removal of non-value-adding processes (as
detailed, below, in figure 7.8). Waiting time is often one of the
biggest and most expensive wastes within fulfilment cen-
tres.

Source: Adapted from: Rushton, A. et. al., The Handbook of Logistics and Distribution Management, Kogan Page,
2001
Lean thinking in warehousing

Though lean gained traction early on in manufacturing, the

simple five-step process can be made easily adaptable for use
within FCs. In order to get started, then, one must complete
the following phases in sequential order:

1. Identify end user needs, which, and in the world of

warehousing, often means greater velocity for downstream
distributors. Put another way, the fewer touches a product
incurs in a cross-dock the better, which is why SIOC pack-
aging has increased in popularity and been push upstream
as an absolute must for manufacturers looking to sell their
products at scale.

2. Plot and prune the value stream, which is to say

visually mapping all the steps within an FC with the end
state being the removal of all those stations or stops that do
not add value for the end user.

3. Bottleneck chasing is the act of returning to the process

flow and routinely looking to speed the one stage within an
FC that limits the overall velocity of goods by adding more
resources or similarly solving for greater throughput.

4. Pull from the customer, don’t push products that end

users do not want and which, ultimately, take up precious
floor or shelf space.

5. Pursue perfection by continuously removing the eight

types of waste.

The fact is that most lean concepts work well in the ware-
house, especially 5S given that the first activity of sorting acts
as a good springboard for new lean programs. Other activities
that fit with FC ops include value stream mapping (VSM), team
building activities, kaizen events, problem solving and error
proofing sprints, kanban and pull systems, line balancing ini-
tiatives, and cell-based waste reduction designs.
 The bottom line in adopting lean is that, and regardless of
how clean or pure a warehouse appears at first glance, once
you “get under the hood” of an operation, there are usually
plenty of opportunities for improvement.

“Assembling” orders

Busy is not the same as productive, especially when taken

within the confines of warehouse operations. What’s more,
there are often bottlenecks that generate still more waste in
the form of queues of excess labor.

A 2006 analysis of distribution sites is case in point having

proved that a typical order was only being worked on 38 per-
cent of the time with the remaining product cycle having been
spent resolving problems (six percent) or waiting in queue at
(56 percent)

In order to reverse such performance issues, warehouse or-

ders should be made analogous to a product being assembled
with non-value activities being streamlined from when a
package or part is received through until it is packed and
shipped. Such efficiency-minded examples might include im-
proving pick paths, limiting unnecessary movements, and re-
pairing all inoperative equipment so as to improve ute rates.
Alternatively, FCs may also look to incorporate batch picking
or zone assignments wherein associates regularly deliver
products for final assembly in regular intervals so that no one
department is kept waiting.

Rack and floor utilization studies may also help managers

determine the best locations in which to store high-velocity
goods. In other words, creating speed lanes that keep fre-
quently picked and shipped goods closest to the outbound
doors as possible will decrease travel time and improve ware-
house rates. Visual aids and maps are also useful in keeping
aisles and racks free of clutter while ensuring maximum
product flow.
Value Stream Mapping in the warehouse

In order to improve product flow, one must first map the

current process so as to give employees not only a bird’s-eye
view of the entire warehousing procedure, but to also afford
them with the opportunity to provide suggestions for im-
provement.

Next, warehouse team leads should create a future-state

map so that employees can chart and monitor progress as well
as provide feedback on current or planned change initiatives.
The latter should include JDI events and kaizens where both
operators and supervisors have the opportunity to question
every activity, treat the warehouse like a large staging area,
develop justifications for new ideas, implement best practices,
and start the cycle anew.

Lean tools in the warehouse

A team-based approach is necessary when undertaking any

process improvement initiative, but especially those that have
the potential to impact multiple departments such as when an
error is received into a warehouse and propagated throughout
the stow, pick, and pack processes. When looking to resolve
such inaccuracies as well as safety concerns, it is also highly
advised to use lean tools such as root cause or fishbone dia-
grams in order to standard work procedures throughout an FC
as well as both upstream and downstream from a particular
operational environment.

Implementing pull systems vis-à-vis kanbans will also en-

able FCs to look for opportunities in which to incorporate
more value-added activities such as kitting or assembly into
their overall processes. What’s more, these functions also min-
imize labor and maximize the use of equipment and space.

Lastly, line balancing and total productive maintenance

(TPM) are also important considerations for the warehouse
looking to match its assets and resources to product or pack-
age Takt time.
Training and engagement

Knowledge gaps tend to appear in organizations when there

is no formal problem solving strategy in place. What’s more,
this also means there is no training available to educate em-
ployees to avoid errors from the start.

Despite the fact that problem solving occurs daily within an

FC, many supervisors and line managers still need to focus on
empowering all of their associates to play a more active role in
resolving their own issues.

In other words, and when a problem arises, management

takes it upon themselves to solve the issue. Once resolved,
there is also no feedback to associates nor any further steps
taken toward educating them on the matter so as to ensure it
is never repeated. That said, both supervisors and operatives
need to be more open to feedback in order to promote a lean-
based culture that sees problems solved at the lowest level.

Lean warehouse examples

Menlo Logistics, a major 3PL provider, has not only imple-

mented Lean at many of its facilities, but also continues to use
it as a competitive advantage. To wit, they have mapped mate-
rial flows as well as studied and rendered product paths from
raw material vendors through to the end user.

Menlo has also created challenge points so that associates

can target potential areas where they can speed up material
flows by treating ocean-based shipping containers as tempo-
rary storage facilities and encouraging cargo trucks to directly
transfer large orders that do not require additional handling to
end users.

By keeping drivers and tractors moving this firm has also

reduced queue time between warehouses and transportation
firms. They have attacked this problem by working with carri-
ers to drop trailers and, in so doing, free the driver and tractor
to pick up a loaded container in order to avoid unnecessary
wait times. This does, of course, require small-window dock
scheduling and synchronization of warehouse workflows, but
which pays dividends by minimizing driver dwell time.

Menlo also met with success after introducing milk runs,

which reduce transportation costs and build more consistency
into inbound supply networks. Moreover, the team also lever-
aged electronic data interchange (EDI) as a means in which to
pass data electronically between its supply chain partners,
which reduced paperwork as well as created an easily accessi-
ble repository of purchase orders and the like.

Menlo’s team of industrial engineers then went on to re-

design warehouse layouts so as to streamline inbound and
outbound workflows, maximize labor efficiency, and increase
space utilization by incorporating dynamic slotting, cluster
picking, system-directed putaway, and other lean best prac-
tices.

Menlo also looked to optimize its processes beyond the four

walls of its many FCs by optimizing delivery routes and rene-
gotiating low-cost carrier contracts.

Lastly, the firm partnered with customers in order to ex-

plore options for renewable packaging for finished goods in
order to ensure no shipping container goes underutilized.
Small changes in carton sizes were found to not only lower
transportation costs, but to also facilitate better storage uti-
lization.

Menlo emphasizes the use of mistake-proofing tools such

as:

• Making it easy to do the right thing while simultaneously

making it more difficult to do the wrong thing
• Easy-to-read visual controls
• Radio-frequency devices coupled with bar-code technol-
ogy
• System-directed cycle counting across the entire ware-
house network
 • Utilization of Six Sigma and SPC
• ISO processes
• EDI
• Standardized operating procedures (SOPs) and process-
es
• Implementation of repeatable steps
• Establishment of one best practice for each task
• Visual documentation of processes
• On-the-spot correction of any activity that causes re-
work, unnecessary adjustments, or returns
• Organized workspaces in line with 5S/6S

All of these initiatives result in better customer service, end-

user experience, lower costs, higher availability, higher cus-
tomer satisfaction, and more reliable deliveries.

It is little wonder that Menlo operates a 250,000 square foot

facility in Michigan that had recently shipped 8,000 orders in a
two-week period with no defects noted while simultaneously
maintaining an inventory accuracy rate of 99.99 percent.

This pilot site’s stated goal was to reduce the cycle time and
increase productivity of various resources by eliminating
waste. Menlo focused their metrics on service, quality, deliv-
ery, cost, and employee morale. Warehouse operators worked
in 20-minute segments or chunks so as to maximize associate
flexibility and enable associates to attack bottlenecks and, in
so doing, maximize order response times.

Items were slotted according to size and velocity with work-

ers assigned to certain aisles in order to keep them safe and
free of clutter.

While team leaders owned their respective processes, su-

pervisors and managers were charged with removing larger,
interdepartmental barriers. Bonuses for hourly team mem-
bers were tied to metrics and, so, reinforced positive behaviors
through monetary incentives. Besides weekly departmental
meetings to discuss performance and improvement, a kaizen
event was held every month with as many as six workers con-
centrating on improving one step in one process for the bet-
terment of the site as a whole.

During this trial run, productivity rose 32 percent between

January and November as measured by gains in lines per
hour. Defects dropped by an astounding 44 percent while on-
time percentage for shipments was north of 99 percent during
this same period. What’s more, the team shipped 100 percent
of its products on time eight out of 11 months.

As another case in point, Ryder Logistics codified their own

lean philosophy in the form of the “Five LEAN Guiding Princi-
ples”, which provide the foundation for operational excellence,
continuous process improvement, and supply chain efficiency.
The guiding principles include people involvement, built-in
quality, standardization, short lead time, and continuous
process improvement.

Ryder also uses visual management, work cells, and SOPs

across its supply chain network and has even gone so far as to
create its very own Lean Academy. What’s more, they have
pushed their lean best practices both upstream and down-
stream from their locations so as to ensure no defects are in-
jected unnecessarily into their ops.

In one instance, and while Ryder was taking over

Whirlpool’s service operations, they implemented a series of
lean tools that reduced costs, improved shipment accuracy
and order cycle time, and boosted overall efficiency by consol-
idating Whirlpool’s various service facilities into one location.

After that, they implemented a variety of continuous im-

provement efforts including the creation of an inventory pro-
file that identified the best storage location for each part to
improve efficiency of order picking, with workflow processes
leading to a more efficient use of labor along with a collabora-
tive application of the existing WMS system that enabled them
to streamline the operation still further.
 Ryder then identified five key performance indicators (KPIs)
(i.e., shipment accuracy, inventory accuracy, order fill rates,
order cycle times, and budget performance) and monitored
them accordingly.

CONTINUOUS IMPROVEMENT

Continuous process improvement (CPI) is no longer a “nice

to have”, but an absolute necessity in the world of warehousing
as it lends itself toward the optimizing of processes that speed
material flow and, ultimately, cut costs.

What’s more, it positively engages employees and empowers

them to solve their own problems.

Lean goes by many names with many coming from the Ja-
panese who benchmarked many processes and events such as
Kaizen, which literally means constant improvement.

More recently, CPI has become a catchall term for any busi-
ness process that improves operational performance to in-
clude the creation of workgroups, Kanban boards, and the
Just-in-Time (JIT) theory of requesting materials only when a
demand has been placed on a firm.

Lean is not restricted to just manual procedures or opera-

tions, of course, and has been shown to work wonders in terms
of optimizing communication structures, drafting solution
strategies, improving customer satisfaction ratings, boosting
staff morale, and codifying computer-based business process-
es and workflows.

Training and IT departments can also benefit from a con-

tinuous improvement culture as can other significant business
units such as development, purchasing, production, sales, and
order processing, among others.
Business process reengineering vs. continuous im-
provement

One way to achieve a quick win across an entire supply

chain network may appear, at first, counterintuitive as it would
have the leadership team start by reengineering or comply re-
placing new business processes.

In other words, and by healing internal process fractures

through focused harmonization efforts, a firm is more likely to
develop procedures that will, over time, become still more
simplified and streamlined.

Not only will such efforts reduce costs associated with re-
work or following up with uncollected accounts receivable, but
also prevent the need to hold standdown interventions. By fo-
cusing on reducing wait times and creating buffers between
interoffice process steps, companies are more like to eliminate
unnecessary interfaces across departments or functions
where control and monitoring are difficult to maintain.

This restructuring is, therefore, a process-orientated ad-

justment that should be levied across the entire business as
well as upstream and downstream business partners, suppli-
ers, and customers. Measuring and analyzing current proce-
dures for their effectiveness and efficiency is a good place to
start as it generate buy-in from external entities looking to
improve their own business processes.

Organizational and operational restructuring is akin to

breaking down internal silos between departments by taking
action on four basic components associated with flattening a
company, or:

• Renewing employee commitment via improved training

initiative
• Revitalizing the redesign process
• Reframing how associates view the organization
 • Restructuring processes and workflows at the strategic
level

One of the biggest issues warehouse leaders are likely to en-

counter when implementing such changes is often resistance
from employees who fear that they could be made redundant.
In order to overcome such barriers is to help associates see
that they own more than just one single workshop or cell, but,
rather, are critical stakeholders up and down the supply chain.

Even if a logistics network is able to push through one

change initiative, employees are unlikely to completely em-
brace the new process if they believe that lean and CPI are just
the latest in a long line of temporary fixes put in place by se-
nior leaders.

In order to ensure that lean plays a more permanent role in

the warehouse, team leaders should immediately follow up
their initial project with an entire portfolio or program of small
Kaizen events that steadily, and consistently, transform the
business.

The continuous improvement process, or CIP, is often be-

lieve to fall under the purview of the quality assurance de-
partment, but, in reality, is beginning to factor into corporate
governance strategies across large multinational firms. This is
to say that CIP should be elevated above more tactical lean
protocols such as Total Quality Management, or TQM.

The primary objective of CIP is to optimize workflows and

business processes by accounting for material and time con-
straints as well as monitoring product and service quality re-
quirements.

Learning organization

Committing to a CIP program is one thing, but how are com-

panies supposed to both, at once, improve their backend busi-
ness processes while simultaneously optimizing for their con-
sumer-facing supply chain KPIs?
 The answer is, of course, to have senior leaders involve em-
ployees at every level, and across every department, through-
out their company. Only in this way, then, can an entire supply
chain network become a learning organization.

To be clear, a learning organization is not merely a firm that

is able to adapt or respond to both internal and external stim-
uli, but, rather, an entity that is able to anticipate changes
within an industry, capitalize on its ability to have learned
from past trends, and, ultimately, craft a competitive advan-
tage out a shared pool of knowledge. In this way, then, a smart
supply chain is like the human body with numerous systems
functioning as one to combat any outside intruder.

The term was originally coined in1990 by Peter Senge. He

identified five development stages or disciplines which are
necessary for the creation and maintenance of learning orga-
nizations. The disciplines are mutually supportive and con-
tribute to the gradual increase in capabilities and competen-
cies of a firm and are summarized as follow:

• Personal Mastery: raising the individual skills of em-

ployees through personal development

• Mental Models: explicit and implicit basic assumptions

in order to explain and describe the sociopolitical context
in which a firm operates as well as to make the assump-
tions visible, discussable, and the aim of CPI

• Shared Visioning: collective visions arise when as many

members of an organization as possible understand and
have a command of their common goals so as to grasp the
purpose as well as the tasks for the achievement of com-
mon objectives

• Team earning: learning as a group takes place when

each member understands the issues
 • System Thinking: analyzing the entire supply chain as a
whole versus approaching it organization by organization
or department by department

A learning organization is ideally a system that finds itself

constantly in motion. Events are conceived as challenges and
used for developmental purposes in order to improve the
knowledge base and, in so doing, increase the probability that
an organization will meet with success.

To be clear, the learning organization still values individual

contributors, especially in the form of problem solvers, but the
overall aim is to share specialized knowledge in order to in-
crease the over organizational IQ. In order to optimally sup-
port organizational learning and knowledge management, a
number of important requirements must be met:

• Clear targets, common objective processes, and renewed

focus on positive customer outcomes
• Cooperation and conflict resolution via mutual trust and
team spirit
• Process orientation and self-regulation in groups
• Democratic and participatory management styles that
support new, innovative ideas, especially within the back-
end operation of the firm
• Incentives that back commitment to a change initiative
coupled with a tolerance for errors during projects and ac-
tivities with high risk-reward ratios
• Ability to monitor and evaluate oneself via IT portals,
which can contribute to a faster and more accurate as-
sessment

Electronic Learning or E-learning is no longer a nice-to-

have, but, rather, an absolute must for global firms that wish to
quickly deploy learning materials and strategies so as to keep
their employees up-to-speed on changes within the firm as
well as forecasts or trends throughout their industrial sector.
This initiative should, however, be backed by strong IT support
and top-down engagement.
 As regards the latter point, the implementation of informa-
tion technology plays an increasingly important role in sup-
porting workplace learning and is increasingly being included
in the catchall Learning Management System (LMS) terminol-
ogy.

For those logistics firm that routinely struggle with solvency

and are now faced with a do-or-die CIP, rushing an initiative
could prove a death knell if the project undermines the morale
of a company or results in customer complaints.

Change management

Organisations as well as those working in them have an in-

herent willingness to maintain the status quo, which, unfortu-
nately, can result in inertia and stagnation. CIP can overcome
such issues by helping employees to measure and analyze
their own problems and implement improvement measures in
order to ensure momentum is achieved from the bottom up.

Most CIPs should include the following aims, objectives,

tasks, and activities:

• Analysis and optimization of workflows and processes

• Increased productivity
• Improvement of product quality and customer satisfac-
tion
• Identification of available resources and synergies
• Lowering costs and reducing waste
• Enhancement of skills, creativity, and employee com-
mitment
• Improving teamwork, business culture, and employee
satisfaction
The human element

Experience has shown that resistance is to be expected dur-

ing the implementation of improvement measures within
most, if not all, organizations. This is especially the case when
it comes to changes within a supply chain. Still, employees
should be encouraged to participate in change initiatives given
that this is one possible area of opportunity in which to inex-
tricably link employee contribution with the long-term success
of a third-party logistics (3PL) firm.

There will be, however, those either unable or unwilling to

accept such change and, so, should be made aware of the fact
that resistance will not be tolerated and given the opportunity
to either receive coaching or seek professional development
opportunities elsewhere in their organization.

While no two CPI events will be exactly alike, each should

navigate the same stages, or:

• Unfreezing: once a firm realizes that there are process-

es are either outdated or underperforming, then they are
likely to grow increasingly aware of threats posed by com-
petitors; this initial realization should cause personnel to
not only question their current behaviors, but also
strengthen and support the call to change as well as create
a kind of “change awareness”

• Moving: in this phase, solutions are compiled, new pro-

cesses and operations are developed, and problems are
addressed in the form of possible solutions in need of test-
ing

• Freezing: the aim of the third phase is to implement the

solutions found and, at the very least, temporarily com-
plete the preliminary change process while codifying those
steps that have already taken place so as to further future
CPI initiatives
 Change management is an umbrella term that includes all
task-, measure-, and activity-related improvements targeted
at achieving a comprehensive, cross-sector set of new organi-
zational strategies, structures, systems, processes, and proce-
dures.

Change agents are those individuals or teams that support

and champion improvements from the upper echelons of a
3PL network. These personnel will have been trained in con-
flict management and intragroup communication techniques
and, so, will be held responsible for the results of a change
program as driven by the change team.

STANDARD WORK

Standardization is the foundation on which to build a quali-

ty house of lean. It is also critical for JIT and Jidoka. Through
standardization, a 3PL can reduce variation in a process and
improve production outputs while simultaneously reducing
quality defects. There are several procedures and documents
that are critical to the success of standardization to include
implementing 5S/6S, team-based training, standardized work
charts, SOPs, work instructions, and visual control sheets.

In warehousing, SOPs are essential toward ensuring all

workers have the tools they need to perform optimally and
stay safe on the job. It is important, however, to develop such
procedures alongside associates on the shop floor.

With the end goal being the improvement of an inefficient

process, change teams need to include both employees as well
as supervisors with the former being charged, ultimately, with
implementing any changes out in the warehouse. Only then,
and once control measures are in place, should the quality de-
partment become involved in order to ensure compliance.

As regards end users, 3PLs need to codify their partnership

expectations via Service Level Agreements (SLAs), which
should include KPIs. All members party to the contract should
also hold monthly meetings with the client in order to discuss
the status of the agreed upon KPIs and to ensure value is being
delivered to customers.

Source: Adapted from Emmett, S., Excellence in Warehouse Management:

How to Minimise Costs and Maximise Value, Wiley, 2005
SOPs

Only when employees understand what is required from

them can they be expected to perform optimally while concur-
rently looking to improve their own work cell processes. Par-
ticipants who are unclear of their purpose or the importance
of SOPs need to be retrained.

As noted, it is important to ensure associates are included

in any revisions to SOPs and that improvements are not
placed, or pushed, to employees from independent industrial
engineers as this will only generate resistance to the change
initiatives.

Once validated and verified, all SOPs need to be posted or

otherwise communicated to all workers. This may not current-
ly be seen as a potential risk, but in order to ensure sustain-
ability and consistency, especially when new employees join
the team, SOPs should be visual within a work area as well as
translated into any of the key target languages in use on the
shop floor.

While knowledge gaps should be corrected on the spot, it is

more important to conduct a root cause analysis in order to
determine where the breakdown in communication occurred
and to correct accordingly.

A standard is the first key to improvement. A standard is the

best known way to performa a task.
The Best way of having more predictable throughput is to
set standards in all departments, measure problems agains
them and solve them.

Any time improvements are made to a production area,

strict adherence to standards is the key to both maintaining
the performance of the line over time and increasing the per-
formance in the future through continuous improvement sys-
tems.
Source: Adapted from Coimbra, E, A,. Kaizen in Logistics and Supply Chains, McGraw-Hill Education, 2013

Standardization

The standardize, do, check, and act (SDCA) flywheel is an

important concept and tool for improving reliability (as seen
below in figure 4.3). Basic reliability is initially generated by
creating a standard that will solve a recurring issue in a same
or similar way. Next, it is important to do, which is to imple-
ment the standard. Operators (i.e., those who will execute the
given standard) need to be informed and trained and, so,
training can be synonymous with doing at this stage.

Source: Adapted from Coimbra, E, A,. Kaizen in Logistics and Supply Chains, McGraw-Hill Education, 2013
 Change agents and champions should understand this cycle
inherently and ought to begin an investigation into an out-of-
control process by first interviewing team leads. Next, they
will need to speak with work cell operators and then develop
next steps in order to reduce errors or variation across the sys-
tem or supply chain.

Depending on their findings, they will need to act in one of

the following ways:

• If the supervisor and operators both believe there is a

missing step or gap in the process, then a team lead has to
change the standard
• if only the supervisor believes there is a knowledge gap,
then retraining of the associate must occur
• if only the operator believes there is an error, then the
process needs to be redocumented
• if neither the super or associate believe there is an issue,
then the department must create a brand new standard

Implementation through (re-)training

Learning through doing is the best way to establish a new

habit, but one that takes time as our brains literally need to
rebuild connections in our brain. Thus, it is important to also
improve muscle memory and to routinely observe employees
OJT. Within gemba, this is the “check” part of SDCA. The stan-
dard needs to be audited at regular intervals. If a deviation is
detected, supervisors need to provide more instruction and
reinforcement of the standard until it is completely assimilat-
ed and is employed almost automatically.

It is easy to understand the role of OJT and instruction,

which is a method of teaching new jobs or tasks to associates
in their work cells. This method was developed by the Training
Within Industry (TWI) training program, a U.S. government
program aimed at increasing productive capacity within the
armaments industries during World War II. After the war, the
same program was introduced in Japan to help the recovery
effort. Toyota was one of the first companies to adopt this pro-
gram and still uses part of it today.

One best practice is to have supervisors train in the process

so that they can, at some point in the future, coach associates
or look for, and reduce, waste in the original set of steps. An-
other top tip is to invest in training upfront, which may limit
productivity initially, but which will reduce errors in the long-
run. Productivity will eventually exceed its original bench-
mark as was seen in one study where a monthlong standdown
resulted in a 27 percent increase thereafter.

What’s more, this same company held a daily kaizen meet-

ing between workers and supervisors at an information corner
close to the line so that the workers could see the results of
their efforts on output, productivity, quality, and compliance
with the schedule.
EQUIPMENT

Handling equipment

Warehouses have a number of different types of handling

equipment in order to speed the receive, stow, pick, and pack
processes. These range from relatively inexpensive trolleys to
mechanical equipment; large conveyance systems to robotic
lifts and storage units. There remains a heavy reliance on
picker-to-goods systems as well and which take on the form of
pallet trucks and lift trucks so as to max out and cube out all
available unit space, which, in and of itself, should be smart in
nature (e.g, movable or relocatable shelving and racking for
media storage media).

Storage equipment

The type of storage equipment utilized within the ware-

house for pick operations will vary substantially depending on
the type and size of product, the physical building constraints,
and the capital available to a 3PL firm.

Replenishment will also place specific material handling

demands on an organization and which should be movable
(i.e., easily transferrable via rolling shelving units or the like).

SOFTWARE

Warehouse management systems (WMSs)

WMS should provide oversight and insight into all internal

FC activities, to include, but not limited to the following:

• Receive: yard planning, electronic advance shipping no-

tices (ASNs) checks, dimension and weight validation, and
quality sampling
• Stow: algorithms to determine the best storage location
and support for all feasible storage types so as to avoid
blocking, among other issues
 • Replenishment: fixed trigger point or order-based re-
plenishment to pick locations
• Pick: pick route optimization, slotting (i.e., optimum lo-
cation by SKU in pickface) and wave management
• Value-added services: kitting, labelling, and final as-
sembly along with bills of materials (BOMs)
• Pack: identification of correct carton size by database as
per the dimensions of each SKU
• Cross-docking: planning, labelling, and sortation
• Sortation: by various categories as based on order, vehi-
cle, and geographical area
• Dispatch: marshalling lane control, documentation, and
transmission of ASNs
• Management: workload planning, performance mea-
surement, productivity modelling (e.g., for new product
ranges or new layouts), billing, pallet management, and
customs form completion
• Cycle, simple bin, and simple record counts: complete
inventory checks and routine sampling

Tracking goods by inward batch numbers and customer or-

der numbers may be carried out across these processes so
that when goods are received they can be identified for quality
purposes as well as to provide customers with information on
the status of their orders.

Picking

There are five types of picking within a warehouse, but

which should be assigned in a manner that boosts productivity
and maximizes worker output (e.g., one picker should not have
to floor pick as well as use a fork truck unless his or her pick
path has been designed for a high-vis order). Other types of
picking include piece, each, unit, item, broken-case, inner car-
ton, full-case, carton, layer, and full- or floor-pallet.

The placement of products should be based on both an ABC

analysis as well as forecast with the end goal being short travel
times or distances and reduced strain on operatives, which
will be reflected in lower costs having to be passed down-
stream to end users.

The ‘Ten Commandments of picking’ are as follows:

1. Design for flexibility and scalability
2. Keep pickers picking and limit their wait times and avoid
having them undertake non-value added activities (e.g.,
carton erection)
3. Minimize travel
4. Minimize product touches and avoid having seasoned
pickers arrive to empty locations
5. Measure productivity and accuracy
6. Pick logically and slot intelligently
7. Pick accurately and retrain as necessary
8. Continue to learn and explore or implement pick path
route optimization software
9. Advocate continuous improvement
10.Ensure that the operator is comfortable and er-
gonomically optimized

Additional top tips in which to keep pickers productive in-

clude providing good lighting, ergonomic equipment, scan-
ners, RFID technology, serviceable trucks to assist with heavy
lifts, easy and logical product placement, and clear, unam-
biguous shelving labels.
The cost of errors

It is a widely held fact that errors lead to increased costs

with miss-picks generating additional expenses in the form of
item recovery costs, labor costs, customer returns, restow ef-
forts, replacement picks, repacking costs, redelivery or ship-
ment delays, admin or customer recovery efforts, accounting
errors (e.g., accounts receivable or non-payment and collec-
tion fees), cancelled orders, loss of customer goodwill, retrain-
ing, and shrink in the form of missed datelots and damaged
goods.

In order to overcome the potential for mistakes, pick strate-

gies should include picker-to-goods, goods-to-picker, and au-
tomated picking. Each of these will be dependent upon the
type of product, the velocity of throughput, and the company
budget.

Picker-to-goods strategies remain the most utilized method

within today’s warehouse operations, but goods-to-picker
methods are gaining in popularity as automation becomes
more sophisticated and also more affordable.

It is likely, then, that multiple strategies will be used in to-

day’s warehouses as they look to cope with multichannel dis-
tribution requirements.

The following picking methods are currently in use in to-

day’s warehouses:

• paper pick lists

• pick by label
• pick by voice
• barcode scanning
• radio frequency identification (RFID)
• pick by light or pick to light
• put to light
• automated picking.
 Vision technology is also being introduced in a number of
warehouses. Companies such as Knapp, Vuzix and Ubimax are
at the forefront of this technology working in conjunction with
Red Bull, DHL, Ricoh, and SAP.

Picking optimization isn’t a metric that is meant to be

achieved once or at a single point in time, but, rather continu-
ously by all within an organization regardless of their depart-
mental assignment. Remember that picking has an important
effect on customer satisfaction, but which should begin with
receive personnel only accepting undamaged goods and stow-
ers placing products in shelves so that their colleagues can re-
trieve them and quickly get products to pack and, lastly, out
the day.

An equal focus should be placed on both organizational as

well as individual order picking metrics (as seen below in fig-
ure 6.9). Publish the results and trending data regularly so
everyone is aware of how well the group is doing. Similarly,
issues feedback, coach, and celebrate successes. Additionally,
create a process of regularly soliciting feedback from pickers
with an eye on future FC-wide improvement events.
 Pick rate comparison for the various pick technologies (Wulfraat 2013)

Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017
PICKING STRATEGY: PICKER-TO-GOODS

The majority of small- to medium-sized warehouses contin-

ue to operate with minimal automation and utilize picker-to-
goods strategies, which include:

Pick to order (individual order pick or discreet order

pick)

Here the picker takes one order or part of an order and trav-
els through the warehouse either on foot with a cage or trolley
or pallet using a pallet jack or fork lift truck while collecting
items until the whole order or assignment is completed.

Orders can be for individual items, inner cartons, full car-

tons, full pallets, or a combination of these.

The picker follows a route or pick path designated by read-

ing a paper pick list, following instructions on a radio data
terminal, or listening to voice commands. New technology be-
ing introduced includes vision picking where the operator fol-
lows directions via a see-through display on a pair of glasses.

All order lines are picked in sequence for a specific cus-

tomer order.

Cluster picking (sort whilst picking)

In order to reduce overall travel time, operators can take a

number of orders out into the warehouse at the same time and
pick into individual compartments on their trolleys or cages.
Some operations will utilize powered pallet trucks that can
carry two pallets at a time or utilize tugs or tractors that can
move multiple pallets through the picking aisles

Batch picking
 Batch picking is where operators pick products for a num-
ber of orders at the same time. This is similar to cluster pick-
ing, but differ in that orders are consolidated into one pick list
and once picked are later broken down into their constituent
orders. Pickers can be sent to the reserve storage area to pick
full pallets or layers of pallets to satisfy the order quantities.

Orders can be batched in a number of different ways. For

example, mail order or e-commerce operations may well batch
by single items. A typical usage is in television home shopping
such as the QVC channel. Different products are promoted at
certain times of the day and orders are placed for them. This
results in a large number of orders for a single product line.
Each order, however, is only likely to contain one or two units.
It makes sense, then, to consolidate these orders into one pick
list and pick large quantities of the product in one pass. It is
then simply a case of attaching a shipping label onto each item
for dispatch.

Orders containing similar items can also be batched togeth-

er. Finally, orders can be split, based on where the products
are in the warehouse.

There are two alternatives here, or: pick by line and pick to
zero. Pick by line may result in excess items being returned to
stock when sourced from full pallets or cartons. Batch picking
can also be accomplished via ‘put walls’.

Put walls are a shelving system, such as pigeon holes, fitted

with LED lights. Each shelf slot represents an order for a cus-
tomer or part of a store order in a retail operation. Items are
picked in bulk from active locations and conveyed to the put
wall area.

Goods are then scanned using the put to light system and
sorted into the positions assigned to the orders in the wave.

Once an order is complete, the light associated with the

shelf position signals to the reverse side of the shelf, where a
packer awaits, to retrieve the goods so as to complete an order
at his or her station. The packer then sends the order to a
shipping lane.

Batch picking using put walls can significantly increase the

number of lines picked per hour as it effectively streamlines
the three-stage approach of pick, put and pack into one area in
the FC.

Zone picking

In zone picking, products are picked from defined areas in

the warehouse and each picker is assigned to a specific zone
or zones and only picks items from within their designated
area. The level of activity will determine the number of picks
allocated per associated. It can also known as a pick and pass
operation.

Orders are moved from one zone to the next as each zone
completes its pick. This movement can be undertaken by a
cage, trolley, or pallet being passed from one operator to an-
other, but is more commonly done by conveyance. The con-
veyors may be mechanized or gravity fed to move the cartons
or totes between the zones.

Orders can be picked simultaneously within the zones and

consolidated later or they can be picked sequentially. Separate
pick instructions are produced by the WMS for each zone for
simultaneous picking.

Zone picking tends to operate with a pick-to-light system,

but can also be operated manually or accomplished with the
use of hand-held barcode scanners and voice-activated tool-
ing.

Wave picking
 In wave picking, orders are combined and released at spe-
cific times during the day or when certain companies and ve-
hicles are set to department the FC as well as during replen-
ishment cycles, and shift changes. They can also be consoli-
dated around product commonality, value-adding service re-
quirements, and priorities. The use of wave picking can bal-
ance workloads by time or by area through the logically group-
ing and releasing orders.

Orders can be released at different times to different zones

based on how long it takes to pick the orders. One downside is
the requirement for a further step in the process, which is to
say having to bring the partial orders back together. That said,
and as discussed with batch and zone picking, it does allow for
a second check on product codes and quantities.

Picking strategy: Goods to picker

Setting up an FC so that goods travel to the picker can re-

duce waste in the form of travel time as well as more direct
costs in the form of labor. In short, pickers do not need to roam
the warehouse looking for picks, which drives productivity for
both the individual and organization writ large.

Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017
Performance measurements

The continuous measurement of performance is essential

when looking to ensure a change has had a worthwhile effect
on productivity. Warehouses need to operate within tight ser-
vice and cost standards and failure to do so can mean the loss
of upstream suppliers as well as downstream customers, es-
pecially if an FC happens to be the last link in the supply chain
just prior to final delivery.

Warehouses are trying to achieve a number of objectives

simultaneously (as seen above in Figure 30.3), such as cost re-
duction, on-time dispatches, and order accuracy. It is there-
fore common to monitor a range of KPIs in order to ensure
that the warehouse is operating efficiently and effectively.
These measures typically include:

Service levels

• percentage of orders dispatched on time

• percentage of orders fully satisfied (i.e., all order lines sup-
plied)
• accuracy of order fill
• stock availability in the warehouse
• order lead time
• returns and customer complaints

Operational efficiency

• number of cases picked per person hour

• number of order lines picked per person hour
• equipment uptime (e.g., percentage hours equipment
available, with no breakdowns or routine maintenance)

Cost efficiency

• cost per case throughput

• cost per pallet stored
 • conformance to budget (e.g., for staff costs, rent, equip-
ment maintenance, packing materials)

Resource utilization

• percentage pallet storage capacity used

• number of hours per day equipment is used (e.g., sorters
or narrow-aisle trucks); do note that high ute rates may pre-
vent peak throughputs being achieved so these measures need
to be interpreted with caution based on the current needs and
demands of customers
• number of standard hours worked.

Stock integrity
• percentage of locations with correct stock (i.e., in accor-
dance with both physical and virtual checks)
• percentage of SKUs with correct stock
• stock turnover (i.e., the total cost of goods sold over the av-
erage inventory); do note that turns are a leading indicator of
velocity and if they are slowing down may be reflective of ob-
solete goods dwelling longer than in the past

Cycle times

• average number of hours between arrival of goods on site

and stow or replenishment
• average number of hours between customer order receipt
and dispatch of goods

Safety

• number of days without an accident

• number of days safety training
• adherence to safety audits and hazard monitoring
 Personnel

• number of days skill training

• percentage of staff multi-skilled
• absenteeism and sickness rates

Environment

• electricity and gas usage

• water recycling
• percentage of returned goods or packaging recycled

This list is by no means exhaustive. As noted earlier, ware-

houses may perform many different roles and, therefore,
would be well-advised to create and monitor those KPIs that
are applicable to their operation.

What’s more, many metrics serve different purposes and

should be classified as follows:

• Leading and lagging indicators: some indicators provide

an early indication of trends while others tend to lag be-
hind. For example, a low level of equipment maintenance
may lead to poor equipment ute rates, which may in turn
impact order cycle times that reduce on-time dispatches.
• Single and joint indicators: a common example of a joint
indicator is on-time in-full (OTIF), which combines mea-
sures of timely deliveries and order fill. Joint measures act
as early warning indicators only and do not help with root
causes analyses.
• External and internal indicators: external indicators
provide insight into the customer experience while inter-
nal indicators provide managers with detailed perfor-
mance within the warehouse.

It is important to understand the information inherent with-

in certain performance measures and metrics prior to select-
ing and implementing them within an organization.
Operational parameters

It is particularly important to monitor the operational pa-

rameters that define the context in which the warehouse is op-
erating. These constraints or limiting factors may, in fact, help
guide operations managers when looking to select relevant
KPIs.

For example, a change in the size of order may result in a

much greater workload for a warehouse despite no change to
throughput and, thus, account for an apparent reduction in
performance.

For this reason, great care must be taken when benchmark-

ing across different FCs since performance measures are only
comparable within the same operational and industry. These
operational parameters include:

• throughput or velocity
• number of SKUs
• unit load characteristics
• product characteristics (e.g., size and ease of handling)
• lines per order
• units per order line
• added value requirements (e.g., kitting and assembly)

Detailed metrics and KPIs

For most logistics operations it is possible to identify certain

key measures or metrics that provide an accurate assessment
of how the FC is performing within the context of the greater
supply chain network. As previously noted, these KPIs are
likely to differ from one company to another as well as across
different industrial segments.

Measures are generally aimed at providing an indication of

the performance of individual elements within an operation as
well as their cost-effectiveness as a snapshot in time whereas
metrics rate-based over a given period (e.g., per shift, day,
month, quarter, et al). In addition, the overall performance or
output is often measured, particularly with respect to the ser-
vices provided so that a firm can arrive at the total system cost
and the return on capital investment across their entire opera-
tional footprint.

KPIs can be categorized in a number of different ways and

aimed at measuring inputs (e.g., time, labor, costs), outputs
(e.g., throughput, production, profitability), and efficiencies as
well as effectiveness in the form of productivity-based ratios.

In practice, an effective measurement system will cover all

of the major operational areas within a business, to include,
but not limited to the following:

• financial KPIs: return on investment (ROI), return on

capital employed (ROCE), stock turnover
• customer KPIs: new customers, lost customers, on time
in full (OTIF)
• sales KPIs: total volume, total value, sales per customer
• process KPIs: productivity, efficiency
• people KPIs: labor turnover, training, average length of
service
• supplier KPIs: OTIF, cost per piece

It is also worth re-emphasizing the importance of hierarchy

in a performance measurement system. Figure 30.9 (as seen
below) shows how a manufacturer of household products uses
a hierarchical model to drill down to more specific measures
when looking to critically assess whether a particular work cell
or individual is performing optimally.
 Hierarchical structure of a measurement system used by
a household of goods manufacturer

Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017

As a case in point, the below summarizes a number of dif-

ferent use cases for those firms interested in monitoring cus-
tomer service requirements, multi-site delivery effectiveness,
and warehousing efficiencies, among others. Do note, that
both the transportation and the FC examples indicate adher-
ence to the principle of the hierarchical nature of both solicit-
ing for as well as providing data-driven feedback to leaders
and employees, respectively.

A supplier of consumables is often found using these major

customer service measurements:
• percentage of orders satisfied in full
• percentage of items supplied at first demand
• percentage of overdue orders
• number of stockouts
• orders delivered within set lead times
• percentage of deliveries outside fixed delivery windows/
times
 A multiple-store grocery retailer may use the following met-
rics in order to improve its delivery transport system. They are
aimed at measuring the cost-effectiveness of the operation
and also the quality of service. Note that there are no cost-re-
lated measures at the lowest level given the hierarchical na-
ture of the operation. The levels and associated measures are
as follows:

• Director/head office (strategic planning and control):

• ROCE
• cost per case (divisional)
• cost per vehicle (divisional)
• cost per value of goods delivered
• cost as a percentage of company sales

• Site managers (management control):

• cost per mile or kilometer
• cost per vehicle
• cost per roll pallet
• average earnings per driver
• maximum earnings per driver
• maintenance costs per vehicle

Below follows the hierarchical structure of a measurement

system used by a household goods delivery firm:

• Transport manager (operational control)

• cost per mile or kilometer
• cost per case
• cost per vehicle
• cost per roll pallet
• cost per journey
• roll pallets per journey
• journeys per vehicle
• damage repairs per vehicle
• miles (kilometers) per gallon (liter) per vehicle
• damages in transit and cases delivered
 • percentage cases out of temperature
• percentage journeys out of schedule

• Supervisors:
• overtime hours as percentage of hours worked
• contract vehicles as percentage of vehicles
• percentage of vehicles off the road
• percentage of drivers absent
• percentage vehicle fill
• percentage of vehicles overweight
• percentage of breakdowns
• average hours worked per driver

The information and data-based requirements for a fast-

moving consumer goods (FMCG) manufacturer and supplier
are applied across three managerial levels. The detailed per-
formance measurements and operating ratios for the compa-
ny’s warehouse operations are as follows:

• CEO:
• profit
• Return on investment (ROI)
• growth
• stock turnover
• distribution cost
• sales value

• Distribution director:
• service achievement
• cost-effectiveness
• capital employed
• stock turnover by site
• storage cost per unit
• warehouse handling cost per unit
• overall labor efficiency
 • • Warehouse manager:
• inventory level
• stock availability
• operating cost
• operating productivity
• actual hours
• standard hours (stock receiving and location, or-
der picking, packing, dispatch)
• warehouse cost per unit (order)
• stock turnover

AUDITS

Quality of service is increasingly differentiating those in the

3PL space and, so, the use of audits and quality control and
assurance systems will enable managers to continually, and in
real-time, assess, evaluate, and improve their service and
product offerings both internally and externally.

Below follows a full risk assessment form as mandated by

many health and safety councils.

The six stages involved in conducting just such an assess-

ment are:

1. Gathering necessary information (e.g., inspect manual

handling and analyze the task in real time)
2. Considering the elimination or reduction of hazards
while reassessing risk levels
3. Recording and reporting all findings from steps 1 and 2
4. Improving safety arrangements based on validated and
verified findings
5. Recording the solutions or get-well dates
6. Developing an emergency plan and carrying out neces-
sary staff training
 Management and operators need to be able to answer the
following questions as regards safety during a health and safe-
ty inspection, or:

Layout

✓ Has an up to date risk assessment (see below) been done

on all hazards?
✓ Are people/vehicles segregated?
✓ Are one-way systems used?
✓ Are aisle and gangway widths adequate to stop collision
damage?
✓ Are emergency exits marked, open and accessible?
✓ Are surfaces flat and unobstructed?
✓ Are markings clear and visible?
✓ Is beam load guidance followed?
✓ Are rack end uprights protected?

Floors

✓ Is load bearing adequate?

✓ Are floors slip-proof?
✓ Are floors flat, level and free from holes/ ‘sharps’?
✓ Do mezzanine floors have clearly marked safe load-bear-
ing capacities?
✓ Are all openings and edges guarded on mezzanine
floors?
✓ Are self-closing gates fitted to mezzanine floors?

Heating

✓ Is a reasonable working temperature maintained for

people working in the warehouse, in recommended ranges
from 18 to 28 °C? Do note, and where a high physical effort
is needed, a low of 13 °C may prove acceptable.
✓ Where reasonable working temperatures cannot be
maintained, such as in warehouses storing frozen food
 products, is an area available to allow employees to warm
up?

Lighting and visibility

✓ Is lighting sufficient to give safe and workable condi-

tions? (e.g., minimum levels in receive and dispatch are 30
lux where racking must be 60 lux and offices rated at 100
lux)
✓ Is documentation clearly written in large letters?
✓ Do all packages contain clear details/marking?

Noise

✓ Normal conversations are at 50–60 dB(A), a loud radio is

70 dB(A), and a busy road with lorry traffic is 80 dB(A).
Levels over 85 dB(A) (e.g., a circular saw cutting wood at a
distance of 1 meter requires preventative action and levels
over 140 dB(A) require immediate action)

Housekeeping

✓ Are aisles kept clean?

✓ Is there a check to ensure that stock does not project
from racking/shelving?
✓ Are spillages immediately cleaned up?
✓ Are packing materials used the correct ones for the job?
✓ Are waste packing materials contained and correctly
disposed of?

Fire risk

✓ Is a written fire risk assessment in place?

✓ Are fire procedures in place?
✓ Are there emergency escape routes?
✓ Is there emergency lighting?
✓ Are the emergency routes indicated by signs?
 ✓ What are the means of raising the alarm?
✓ What are the means of firefighting?
✓ Is all the equipment maintained and up to date?
✓ Has all staff had annual fire training?
✓ Have the fire procedures been reviewed recently?

Organizational health and safety

✓ Have all health and safety aspects of the warehouse op-

eration been assessed?
✓ Has an organization (and arrangements) for securing
such safety been detailed in the safety policy?
✓ Has a person been appointed to be responsible for ware-
house safety?
✓ Have safe systems of work been set up?
✓ What monitoring is carried out to ensure that the sys-
tems are followed?
✓ Have all drivers/operators of mechanical equipment
been adequately trained and tested?
✓ Is there a satisfactory formal licensing or authorization
system for equipment users/drivers?
✓ Have all personnel been trained, informed, and instruct-
ed about safe working practices where warehousing opera-
tions are involved?
✓ Is there sufficient supervision?
✓ Has an update risk assessment been done on all haz-
ards?
✓ Are people/vehicles segregated?

Take care to use the accident pyramid as well as to display it

prominently in all work areas:

✓ For every 1 serious injury, there are 100 minor injuries.

✓ For every 100 minor injuries, there are 1,000 close calls.
✓ Investigating 1 close call, then, can reduce the possibility
of incurring hundreds of minor injuries or, worse, one ma-
jor incident
External roadway, yard, and internal aisle traffic

✓ Are they of adequate dimensions?

✓ Are they of good construction?
✓ Are they well maintained?
✓ Are they well drained?
✓ Are they gritted, sanded, etc., when slippery?
✓ Are they kept free of debris and obstructions?
✓ Are they well illuminated?
✓ Are there sufficient and suitable warning signs?
✓ Are there speed limits?
✓ Is there a one-way system (as far as possible)?
✓ Is there provision for vehicles to reverse when neces-
sary?
✓ Are there pedestrian walkways and crossings?
✓ Are there barriers by exit doors leading onto roadways?
✓ Is there a separate vehicle/equipment parking area?

Loading and unloading

✓ Do loading positions obstruct other traffic, or do pedes-

trian ways need to be diverted?
✓ Are there special hazards (e.g. flammable liquid dis-
charge) and do pedestrians need to be kept clear?
✓ Is there a yard manager to supervise the traffic opera-
tion, to control vehicular movement and to act as a banks
man during reversing?
✓ Has the yard manager received satisfactory training in
the use of recognised signals, and has that person cover
during absences?
✓ Will the layout of loading docks prevent trucks falling off
or colliding with objects, or each other?
✓ Can any mechanical hazards be caused by dock levelers
or the like?
✓ Are methods of loading and unloading assessed?
✓ Are all loads stable and secure?
✓ Are safe arrangements made for sheeting?
✓ Is there a pallet inspection scheme?
 Manual handling task analysis

The following questions and tasks are a guide toward effec-

tively analyzing manual handling:

Task

✓ Are loads held at a distance from the body?

✓ Do body movements involve stooping or twisting?
✓ Is excessive pushing or pulling involved?
✓ Is frequent and prolonged effort involved?
✓ Are there sufficient rest periods?

Load

✓ Is it heavy, bulky, difficult to grasp, unstable, hot, or

sharp?

Work environment

✓ Does the space available prevent a good posture?

✓ Are there uneven, slippery, or unstable floors?
✓ Are there variations in floor levels?
✓ Are there poor light conditions?
✓ Are temperature levels satisfactory?

Individual capability

✓ Does the job require above average strength?

✓ Is the job a hazard to people with special health needs?
✓ Does the job require special training?
Fork-lift truck maintenance

Incidents, breakdowns, and otherwise preventable issues

with equipment will more likely be reduced by asking your
maintenance technicians the following:

✓ What is on the manufacturer’s data plate?

✓ Are you working within this data?
✓ Are brakes, lights, warning devices, safety locks and
overhead guards in safe and working order?
✓ Are all drivers properly trained and do they attend re-
fresher courses?
✓ Are drivers’ defect reports (see below) completed daily
and acted upon?
✓ Are trucks maintained daily, weekly, semi-annually, et al
and in accordance with previously agreed upon checks?

Periodic checks

Daily check: at the start of each shift, the driver or supervi-

sor must perform a spot inspection
✓ Ensure that tire pressure is correct
✓ Note and advise on any tire damage
✓ Ensure that all brakes are operating efficiently
✓ Ensure that all lights are working correctly
✓ Check fluid levels in engine trucks (fuel, water,
lubricating oil, hydraulic oil)
✓ Ensure that batteries, where appropriate, are ad-
equately charged
✓ Ensure that lifting and tilting systems are operat-
ing correctly

At the end of each check, a written report should be com-

pleted, specifically
✓ Weekly check (of 50 hours or as recommended by the
manufacturer):

Maintenance supervision check

 ✓ Certify all daily checks
✓ Check the operation of steering, lifting gear and other
working parts
✓ Check the condition of mast, fork, attachments, and lift-
ing mechanisms
✓ Inspect the hydraulic system for leaks and damage

At the end of each shift check and document the following:

✓ Six-month check (or 1000 hours or period recommend-

ed):
✓ Check all working parts.

At the end of the check, complete a certificate or similarly

document any findings and escalate as necessary.

Racking maintenance and care

This will be facilitated by asking the following questions:

✓ Is the racking on sound and level floors?

✓ Was it installed in accordance with instructions?
✓ Are double-sided runs connected and spaced with ap-
propriate run spaces?
✓ Is racking fixed securely to the floor?
✓ Are the aisles wide enough to allow adequate manoeu-
vring?
✓ Are the beam connector locks securely fixed at both
ends?
✓ Are the correct maximum load notices displayed?
✓ Are all racks and beams aligned?
✓ Are the correct pallets being used?
✓ Is there any physical damage?
✓ Are end protectors fitted?
✓ When was the last inspection undertaken?
✓ Is all reasonable care taken for accident prevention and
racking safety?
 ✓ Have there been any changes to product/handling
equipment since the original specification?

3PLS

Outsourcing is not a panacea for poor internal processes as

noted below in figure 14.5. In other words, there are a number
of reasons why supply-chain partnerships fail.

In order to avoid such outcomes, all parties need to be will-

ing to enter into open discussions on how they can better
complement one another with the end goal being greater ve-
locity, order magnitude, and customer satisfaction.

Why outsourced relationships fail (courtesy of the Eye for Transport)

Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017

Another best practice, and as confirmed by some 63 percent

of those involved in 3PL-related contracts, was clearly definite-
ly partner expectations and requirements early and often.
That said, it should not be surprising that the top reasons
for contract cancellation or nonrenewal included a lack of
trust, inflexible contract terms, poor customer service, rate
hikes that were passed upstream, overcharging or double
billing, identifying lower-cost competitors, and a lack of com-
mitment from 3PL providers.
Source: Adapted from Thomas, M. J. W., Training and Assessing Non-Technical Skills: A Practical Guide, CRC
Press, 2017
 Other areas where Logistics Service Providers (LSPs) came
up short included a lack of innovation and poor customer ser-
vice. Oddly, innovation saw a year-over-year decrease of some
10 percentage points along, which is both a troubling intra-
sector trend and one that does not bode well for future cross-
industry partnerships.
CONCLUSION

This final chapter touched on a number of both traditional

as well as more evolutionary topics regarding lean and Six
Sigma in the warehouse manufacturing space.

To start, the discussion focused on the importance of main-

taining a just-in-time mentality—or mindset—when it comes to
setting up internal processes. Again, and as mentioned in the
first chapter, knowing what outcome a firm seeks to achieve
will help GMs and site leads design a more efficient and effec-
tive warehouse.

Case in point, and when looking at the eight types of waste,

recognizing that consumers don’t value additional packaging
or paperwork means managers need to engineer out any pro-
cesses that result in overproduction and overprocessing by
partnering with upstream suppliers that are able to deliver
products directly to end users.

The chapter then went on to explain that once a set of ac-

tions has routinely and consistently led to higher customer
satisfaction or met another similar OKR or KPI, it’s time to
codify the procedures into a set of standards.

These SOPs will then help employees and team leads recog-
nize bottlenecks or otherwise solve their own problems when
confronted with a defective product.

Each of these phases—defining an intended for outcome,

measuring customer satisfaction, analyzing how to make a
process consistent, implementing across a network, and ced-
ing control of the steps to employees—is not only lean and Six
Sigma in practice, but also the mark of a Learning Organiza-
tion.

The chapter spent time discussing this evolutionary model

since change—which is effectively what needs to result from a
continuous process improvement initiative—is taking place
within warehouses at breakneck speed.
 In other words, if an FC attempted to push transformative
changes to employees without training them or educating
them on why a new procedure or technique was necessary in
the operational environment, then they would be met with stiff
resistance and decreased productivity.

Including workers in learning management systems is also

critical given that supply chains are rapidly coming to include
more than just drivers go in one direction from manufacturer
to supplier to distributor. In short, this 3PL chain of custody is
now looking more and more complex given the need to track
and monitor goods—in real time—using RFID tags, barcodes,
and, in due time, AI.

Being prepared for these changes is vastly improved when

warehouses have—at their foundational core—a culture of rou-
tinely seeking continuous process improvement initiatives.

As noted above, SDCA is an easily implementable model that

can be applied to most any change requirement across a sup-
ply chain to include the roll out of new software, adopting up-
dated EDI protocols, improving picker training, renewing
SLAs, or reintroducing long since forgotten equipment audits.

The continuous process improvement journey should not

stop out on the shop floor, of course, but also be applied to
back-of-house operations like accounting and contract acqui-
sition. Bottlenecks can appear both when there are too many
touchpoints between departments as well as across different
companies. As noted in the above chapter, however, software
should not be seen as a panacea for too much paperwork so
much as the final control mechanism put in place one more
foundational processes have been improved upon and stan-
dardized.

Despite the amount of change in the air, the future of ware-

house management for logistics enterprises, 3PLs, and ware-
houses remains bright given current consumer trends; which
should act as a warning—since, and especially in this field—
change is really the only thing that ever stays the same.
SUMMARY

n reflecting upon the four primary topics covered in this

I book—or warehousing, personnel management, workforce

training, and lean warehousing—it would be absurd to
gloss over the impact such largely unanticipated events as the
2008 financial crisis, the 2011 Tōhoku tsunami, and 2019
COVID pandemic bring to bear on the logistics industry. But
what lessons learned should GMs and site leads really glean
from such experiences and what can they do in the face of not
only future disasters, but also wildly unpredictable consumer
trends?

As was the case in 2008 and 2011, recovery following a

downturn or disruption is often spread unevenly. This is due
in part to warehouses and supply chain networks that are built
on principles dating back to the nineteenth century or—and
put another way—are too prescriptive in their day-to-day func-
tionalities.

Case in point, large automotive firms in Japan—who were

once hailed as lean and Six Sigma champions—were running
largely traditional, external shipping operations. And, so,
while their internal processes were churning out defect-free
vehicles, they had no alternative courses of action in which to
explore when the 2011 tsunami rendered them incapable of
creatively solving shipping bottlenecks.

While an event of this magnitude is unlikely, there are no

fewer disruptions at ports and seaside warehouses when
workers go on strike. This points directly back to the above
text, which encourages employee empowerment and people
positive processes targeted a resolving issues by looking for
standardized processes that are both—at once—safe and effi-
cient.
 When looking forward, then, the importance of onboarding
personnel and training associates should not go understated.

To wit, revenue up for grabs in the logistics industry is pro-

jected to grow anywhere from between 77USD billion to nearly
5USD trillion in the post-pandemic landscape. This means
that warehouses, FCs, freight forwarders, manufacturers, and
suppliers need to staff and train personnel who are ready—and
able—to add immediate value.

This will be made harder still, of course, given the mass ex-
odus of the current, aging workforce and which will likely trig-
ger a squeeze on the supply of experienced managers and op-
erators in this space. GMs and site leads need to prepare in
advance for this potential constraint by improving their long-
term career advancement programs and training initiatives.

Additionally, and as discussed, this needs to occur alongside

effective marketing campaigns that repaint the warehousing
space as a place that marries high-tech solutions with cutting-
edge digital collaborations. The needs of the customer will also
have to be tied to any changes within the training depart-
ment’s modules or curricula so that employees have the skills,
abilities, and attributes they need to fulfill orders and avoid
quality escapes.

Workforce training will need to take on a digital fitness

component as well given that AR, VR, AI, robotics, and other
advancements in speeding FC throughput are already making
inroads into the logistics industry. Consider, the Internet of
Things and Industry 4.0 are already seeing some firms exper-
iment around automated vehicles, drones and other smart de-
vices so as to free associates to focus on more value-added or
strategic tasks.

Other, broader warehousing trends seem more obvious:

large platforms are likely to continue to dominate the online
space and consumer demand is only going to grow. Consider,
and by some estimates, there will be 41 megacities around the
world by 2030 with populations in excess of 10 million people.
These individuals will likely continue to demand low-cost,
last-mile deliveries and will turn to the likes of Amazon and
Alibaba if there is no disruption to the space before then.

And while this might sound like a threat or vulnerability,

startups continue to enter this space and crowd-share solu-
tions in order to get packages to shoppers as rapidly as possi-
ble. This requires not only smart staffing, but also a willing-
ness to decentralize control in order to grab a piece of this
physical Internet pie.

Still more trends may surface as new law or shifting trade

alliances around renewed geopolitical tensions, especially
when taken with various changes that were already in motion
prior to the pandemic. By way of an example, Brexit still re-
mains a point of concern for many—as it should—and will re-
quire creative solutions for those with operations based in and
around the UK.

Trade tariffs and inflated freight costs will also likely be

cause for concern since some countries may try to boost their
own economies by discouraging purchases from overseas or—
conversely—lower barriers in an effort to flood the market with
aging or dwelling inventory that is nearing obsolescence due
to the pandemic.

This will have either a positive or negative impact on stock

levels, which will have to be reevaluated since every member
of the supply chain pipeline will have to accept that both B2B
and B2C shoppers will only continue to demand products
faster and with far less concern as to the who or what deliv-
ered the package—something known as being shipper-agnos-
tic.

For many large 3PLs this is proving to be an opportunity to

break into the retail space, which is to say: don’t be surprised
if Maersk places a package on your doorstep in the not-too-
distant future.
 Alternatively, large retailers are also carving out space in the
logistics space in order to better service those within the last-
mile of delivery—Walmart being case in point.

Still, shoppers are just as equally concerned with sustain-

able business practices as they are cutting costs. Moving into
the reverse logistics space is but another potential option for
those not yet able to compete with the dominant physical In-
ternet forces of Amazon and eBay, but who are ready to diver-
sify their own internal processes and add value in other way.

Lastly, all of these changes will be increasingly automated,

which positions those firms with a strong digital culture well
ahead of the competition. Key considerations in this arena in-
clude standardizing IT protocols, migrating to cloud-based
platforms, exploring blockchain, experimenting around UAVs
and drones, and 3D printing. There will—and should—be con-
cerns over security regarding personal information and data,
but as fast as these structural changes are occurring, well, it is
likely to be some time before supply chain partners have fully
assessed the risks to their current—and future—operations.

No matter, and when returning to the topline topics of ware-

housing, personnel management, workforce training, and
continuous process improvement, having solid goals and KPIs
in place is critical when looking to redesign an entire ware-
house or supply chain pipeline. Once reconfigured, it’s of
paramount importance to identify optimized workflows and
standardize steps that ensure a positive customer outcome
each and every time a package goes out the door.

And while there is no one-size-fits-all solution, the future of

logistics and transportation in the post-pandemic space is
here. What that means in the near-time, however, is entirely
up to GMs and their appetite for risk, uncertainty, and—of
course—opportunity.
AFTERWORD

ean remains relevant even in modern warehouse logis-

L tics given the amount of overlap it shares with produc-

tion-based flow processes. According to a McKinsey
report, site leads can reduce warehouse operations costs by
some 50 percent when utilizing lean principles.

So, why then is there a turning away from lean in favor of

agile project management when the former has a considerable
track record as backed by scientific findings?

Perhaps that is the problem, or: it’s not trendy enough.

Many organizations in warehouse logistics are young. New

and young leaders want quick fixes so as to quickly lower op-
erational costs across their numerous e-commerce and omni-
channel logistics networks. Moreover, many young leaders
trust technology more than the soft philosophical approach of
lean.

Implementation of lean is nothing you can hurry or do in a

few days. You need to have the right leadership as well as mu-
tual trust and respect throughout the organization. In order to
achieve optimal results, you need flat organizations with great
communication between leaders and staff. You want your em-
ployees to be experts on the floor who work actively with CPI
in mind. They should take ownership of their processes and
always perform their jobs to spec, but with an eye on “better”.  

That said, and back to the overt focus on technology, there is

still an analog or human element that needs to occur sidelong
with automation, robotics, AI/ML, digital transformation, and
any IoT initiatives. in warehouse logistics. This means servant
leadership throughout the organization is necessary and that
mere management coupled with a staid focus on maintaining
the status quo is no longer “good enough”. Given that lean was
forged by fire, or in a volatile production environment with a
pull mentality, it is still relevant in today’s high-demand retail,
e-commerce, and e-grocery sectors.

Lean may also be falling out of favor, at least superficially,

because it is a long-term program that often does not result in
snap improvements in just a few days.

That said, and regardless what you and your team decide to
call the improvement journey, one thing is for sure: beating
the competition will require solid processes that are standard-
ized and supported by everyone within, and across, a supply
chain system.