What is Kaizen?

Kaizen is a Japanese word that means “change for the better” or “continuous improvement.” It is based on the idea that small, ongoing, changes lead to significant improvements. Developed in the manufacturing sector to lower defects, eliminate waste, boost productivity, encourage worker purpose, and promote innovation, Kaizen applies to any industry… including third-party logistics (3PL) warehousing.

Although started in manufacturing, Kaizen’s basic principles have been widely used in other industries, with companies like the Mayo Clinic (healthcare) and Pixar (computer animation) leveraging Kaizen to drive improvements throughout their organizations. Kaizen is built on the belief that no process is ever perfect, and by identifying and resolving problems, employees can bring about change and bring the process closer to perfection.

One of the chief benefits of Kaizen is that it values people in your organization/warehouse. The importance of the opinion of those people who know and live with the processes encourages an attitude of searching for ways to improve your warehouse’s processes and can change the way your people think.

When you first embark on a culture of Kaizen, past problems may have been kept quiet or hidden. Now the entire workforce is encouraged to solve problems. People speak up. Collaboration becomes more prevalent. With incremental change your warehouse team can see the small incremental improvements and take responsibility for identifying new gaps to build a company-wide shared purpose. The iterative process enables ideas to be continuously tested and promotes a culture of problem solvers.

Plan, Do, Check, Act

The Plan, Do, Check, Act framework supports the principles and practice of continuous improvement. Use this framework to put your first Kaizen project into action for your 3PL warehouse.

Plan: The first step in enacting your first Kaizen project is to identify the problem you want to solve. By using the Kaizen method, you do not have to solve all the issues at once, take them one at a time. Next you need to analyze the problem. Find out what the core issues stems from by involving all the people part of the process. Develop an experiment. Clearly define the actions to be taken to resolve the change and plan a small experiment under controlled conditions. Finally, make a prediction on the results of the change.

Example: For 3PL warehouses, start with pulling key metrics from your warehouse management system (WMS) software to gain insight on metrics you might want to improve.

Do: Test the proposed solutions. Get all key stakeholders involved in the change you have identified. Develop and implement your solution and your plan in a small test environment and under controlled conditions.

Example: For 3PL warehouses, this might mean looking at dock to stock processes and improving receiving to putaway time. One experiment might include testing receiving advanced shipping notifications (ASN) to reduce time confirming inventory received.

Check: Check the result and confirm your prediction. Measure the effectiveness of your plan against something you can measure to compare to and see if your predictions is supported by the results.

Consider the following in the Check phase when reviewing the results:

1. Did you achieve your desired results?
2. What did not work?
3. What have you learned from implementing the change?
4. Is there enough data to show the experiment worked?
5. How does the experiment scale?
6. Is the proposed solution practical?

Example: For 3PL warehouses, if looking at dock to stock times, did receiving against ASN improve time to putaway?

Act: If the solution is effective, implement the changes on a broader scale. Always document your standard operating procedures for ease of rolling out the change and new onboard hiring training.

You want to make sure to identify the following:

1. What resources are needed to enact the change on a broader scale?
2. What training do we need to fully implement the improvement?
3. How can we monitor the impact of the solution?

Example: For 3PL warehouses, consider implementing receipt against ASN with all customers.

Improving Your Warehouse, the Kaizen Way

Once you have started using the Kaizen method the next questions are: What are some other areas for improvement? And when do we start our next Kaizen Project?

Everyone involved will be saying “Now on to the next one!”

For more tips on how to scale and drive efficiency for your 3PL warehouse, download the Peak Season Playbook.