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Distribution Centers Pursue Lean Strategies to Slash Inventory, Cut Costs

Executives from Genco, Walgreen, and Safeway share their experiences with lean strategies

(Boonton, NJ, November 6, 2013) — Whether the problem is as big as $9 billion in slow-moving inventory or as small as unclear labels on product, DCs are embracing lean principles as a way to improve their efficiency.

Proponents of lean thinking espouse a variety of acronyms for identifying inefficient practices, and they use Japanese terms to describe the ferreting out of waste. But in essence, says Andy Hunter of third-party logistics provider Genco, lean isn’t complicated. “Lean is a very simple idea,” he says. “It’s just about reducing waste.”

The November issue of Distribution Center Management, reports on the lean efforts at Genco, Walgreen, and Safeway.

At Walgreen the problem was two-fold, too much inventory and too few supervisors. Walgreen DCs had only one supervisor for 150 workers, about a tenth of the number it needed.

With too much fat and too little supervision, Walgreen decided to embark on a lean program. Part of the solution was to involve everyone in the DC. Now, every shift starts with a 15-minute meeting on lean efforts. Considering that Walgreen has 10,000 workers in its supply chain, that short meeting represents a huge investment.

Managers also take a daily walk through the facility to look for inefficiencies. And signs are posted in the DCs, which outline common sources of waste including mistakes, waiting, transportation, too much motion, and excess inventory.

Details on the lean efforts at Genco, Walgreen, and Safeway appear in the November issue of Distribution Center Management.

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For more than 40 years, Distribution Group publications have helped distribution center and warehouse managers increase productivity, cut costs, and meet increasing customer demands. Distribution Group publishes Distribution Center Management newsletter, books and reports, and a free e-newsletter.

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