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Lessons from “The Goal” for Optimizing Warehouse Operations

By June 13, 2024Uncategorized

As part of my personal and professional development, I’ve been participating in our book club at Lucas Systems over the past several months. We’ve read and discussed some fantastic and thought provoking books. One of the most recent, “The Goal,” by Eliyahu Goldratt and Jeff Cox, suggested by our CEO, really got me thinking about the book’s centering theme, the Theory of Constraints, it’s applicability to my area of expertise, software development, and how it can also be applied to processes in the warehouse.

“The Goal” is a management-themed novel whose main message centers on identifying and addressing constraints within a system to improve overall efficiency. The Theory of Constraints suggests that, in any process, there is usually a bottleneck or constraint that limits the entire system’s output, and, without addressing these, improvements in other areas of the system will have no effect. Through the story of a plant manager, it offers insights on how to improve efficiency, which also includes optimizing the production process as a whole, instead of focusing on individual parts. By focusing on alleviating or optimizing constraints, and seeking to optimize the entire process, organizations can enhance their performance and achieve better results.

In the context of warehouse picking operations, the main message of “The Goal” can be applied to optimize processes using Goldratt’s Five Focusing Steps, also known as the Process of On-Going Improvement:

Identify the Constraint – You must begin by identifying the limiting factor of your people, process, or technology because improvements in any area other than the constraint will not result in “more profits for shareholders, delight for customers, or satisfaction for employees.”In our picking example, you would begin by analyzing the entire warehouse to identify where the bottleneck or constraint occurs. Many times, the constraint will be obvious and other times it will need discovered. It could be a specific location, equipment, or a particular step in the process. Is picking by paper slowing things down? Is the slotting of particular products causing pickers to spend too much time walking between picks? Is auditing revealing issues with a particular area? Or maybe, picking is the constraint (as it often is) but why? Is it because of bad slotting, slow pickers, or is your picking tech not adequate?
Exploit the Constraint – Once you identify the bottleneck, make sure that you are getting the most of it. Optimize and maximize the efficiency of the constrained resource. This might involve streamlining processes, improving utilization, or enhancing the performance of the bottleneck.In the book, constraints are stations such as machining and heat treatment. They address these by maximizing up-time, by examining and optimizing batch sizes, and by moving quality control stations’ position in the workflow to before the constraints.

One example in the warehouse could be optimizing the path taken by pickers. On-floor travel often accounts for half of all labor time, mainly in order picking. Most WMS and other picking systems create travel paths that are based on location sequence, typically up one aisle and down the next, without deviation. This leads to a lot of dead travel. Not only does this hurt productivity, but it’s also a strain on your workers who are walking far more than they need to be. Rather than a traditional serpentine model, where the user will traverse each aisle that has picks in it, in most cases traveling the entire length of the aisle, organizations should consider solutions that utilize traveling salesman mathematical algorithms, crunching travel costs across a digital map of the warehouse and in many cases reducing on-floor travel by 30-50%.

Subordinate Everything Else – Once you have identified and begin to exploit the constraint, you need to also subjugate the remainder of the system to the constraint. There is likely capacity on non-constraint processes that needs to be better allocated.In our warehouse example, you would adjust the other elements of the picking process to support and align with the bottleneck. This means organizing and synchronizing the flow of materials, information, and activities to ensure they complement the constrained resource rather than overwhelm it. Investing in warehouse execution software is one way that organizations can organize, synchronize, and optimize workflows to illustrate this concept. For example, Jennifer, the brains and voice of the Lucas solution, orchestrates warehouse processes for people, robots, and machines.
Elevate the Constraint – Invest in improvements to increase the capacity or efficiency of the bottleneck. This could include upgrading equipment, implementing new technology, or redesigning the workflow to enhance the overall throughput. In the book, more machines were purchased and employees hired or trained to use them at the machining station. To create additional capacity in heat treatment, they teamed up with a local service provider to handle some of their batches. At your warehouse or distribution center, you might invest in training programs to improve picker efficiency, implement a more streamlined order batching system, or introduce technology like barcode scanners to enhance accuracy and speed.

Staging confirmation– Pickers confirm what location they stage each order
Staging visibility– A screen displaying the time each order had been staged, along with the order details
Packing confirmation– Packers select and confirm what order they have collected to pack
Packing productivity– Packing productivity by user (# of orders/lines/pieces) recorded and reported on a management consoleThrough this elevation, they were able to achieve 99.0% order accuracy, a35% efficiency gain and 60% improvement in throughput.

Repeat the Process – After addressing the initial bottleneck, reassess the system to identify the new constraint. It could be the same, or it could have revealed itself up or down stream of the old constraint.The process is iterative; as constraints are overcome, new ones emerge. Continuously monitor the impact of the changes on the overall system performance. Assess whether the changes effectively elevated the constraint and if any new bottlenecks have emerged. Adjust strategies as needed to optimize the entire process continually.

In picking operations, perhaps you increased throughput, but accuracy has waned and that is costing you greatly. As in the book, perhaps you now need a new marketing and sales strategy because your newfound efficiency and productivity have allowed you to eat through your backlog of orders.

The lessons of the Theory of Constraints and “The Goal” provide a new way of looking at things, and a different process for uncovering challenges and developing answers. By applying the Theory of Constraints to warehouse picking operations, businesses can streamline their processes, reduce delays, and enhance overall efficiency, ultimately leading to improved customer satisfaction and profitability.

Patrick Byers leads internal automation and engineering processes at Lucas Systems, developing software-centered solutions that solve business problems for Lucas warehouse and DC customers throughout the world.

With a keen focus on improving end user quality of life and maximizing the warehouse floor workers’ experience, Patrick strives for continuous improvement in the processes and technology he oversees. Patrick is uniquely skilled in software development, automation, visualization, data organization, user experience and interface design.

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