Utilizing Lean Thinking to Reduce Deficiencies in Food Industry Warehouse Operations

Abstract

Background:
Logistics within the food industry have been under increased pressure in recent years due to factors such as the invasion of Ukraine and Covid-19. This has put additional focus on efficiency throughout the supply chain, including warehousing activities. Warehousing has historically often been seen as a burden as it provides limited value-adding activities which means organizations constantly strive towards improving efficiency. One way to improve warehouse efficiency is to identify and reduce wasteful activities such as waiting, overprocessing or unnecessary motion and
errors such as incorrect placement of goods, rework or corrections. These wasteful and inefficient activities constitute the phenomenon of the thesis: Deficiencies in warehousing.

Problem definition and scope:
Company X is a leading food manufacturer with production across Sweden. The company is currently utilizing more man-hours for warehousing activities than the planned activities should incur, at one of their largest factories. One major element leading to an increased need for manhours was deemed to be deficiencies. Hence, the purpose of this master thesis is to evaluate warehousing operations in the food industry to identify and understand deficiencies and to provide
alternative actions that reduce or eliminate identified deficiencies, to reach an improved efficiency. This purpose is achieved within the scope of warehousing activities outside of production, meaning storing of raw material and finished goods at a manufacturing factory.

Theoretical framework and methodology:
The theoretical framework of the thesis is mainly founded in three different aspects. Warehousing theory to establish the context of the research, theory regarding errors in warehousing to identify common deficiencies and Lean to understand further identify inefficient activities as well as provide a philosophy and tools to counteract deficiencies. The research was conducted as a multiple case study, focusing on four different production units connected to one factory. The theory has been used in unison with interviews, SAP-data, documentation and observations to build a qualitative and quantitative analysis on both a within-case and cross-case basis.

Result and Conclusion:
The findings illustrated a large array of different deficiencies affecting the warehousing operations at Company X. The deficiencies were connected to eight different areas: Cross-functionality, SAP, Traceability, Layout, Labeling, Other activities, Organizational Decisions and Equipment. Their individual impact and occurrence for each case was established to portray the influence on efficiency. The findings further established that the areas of Cross-functionality, SAP and Traceability affected all the cases, while the other deficiencies were deemed to be more case specific.

The deficiencies were addressed with improvement actions based on Lean tools and thinking. Lean tools provided a practical way to redesign working processes to minimize deficiencies. While, Lean thinking was suitable to address the corporate culture to guide it towards a state which is less prone to deficiencies. The improvement actions were developed on a cross-case and case-specific basis depending on the characteristics of the deficiency. These were boiled down into a number of short and long-term recommendations, mainly focusing on recommendations which were implementable for the entire factory.

Contribution:
This thesis has been a complete elaboration between the two authors. Each author has been
involved in every part of the process and contributed equally.

Popular Abstract

Logistics within the food industry have
been under increased pressure in recent
years due to factors such as the invasion of
Ukraine and Covid-19. This has placed an
added focus on efficiency throughout the
supply chains within the industry, which
still needs to meet the increasingly
turbulent market associated with food
retail.

This means organizations need to explore a
large range of avenues to increase efficiency
in the supply chain, including warehousing
operations. One way this can be achieved is
through identifying and reducing wasteful
and inefficient activities, which constitutes
the phenomenon of the thesis: Deficiencies in
warehousing.

We were invited to a food industry
organization which was struggling with
warehouse inefficiency. The organization
understood there was a need for
improvement but lacked an understanding of
deficiencies affecting their warehousing
operations. Hence, the purpose of this master
thesis is to evaluate warehousing operations
in the food industry to identify and
understand deficiencies and to provide
alternative actions that reduce or eliminate
identified deficiencies, to reach an improved
efficiency.

To achieve the purpose, a multiple case study
was conducted of four production units in the
organization utilizing both qualitative and
quantitative sources.
The findings showed more than 50 individual
deficiencies which indicated a wide range of
issues. These were condensed into eight
groups of deficiencies, three of which were
deemed to affect all cases. These three are:
Cross-functionality, SAP and internal
Traceability.

Furthermore, the analysis showed that Lean
could be used to identify and characterize
deficiencies throughout the operations, in
order to ensure that the originating cause
rather than the symptom were addressed.
Additionally, improvement actions based on
Lean thinking and tools were deemed
suitable to address the identified deficiencies.
Lean thinking was utilized to address the
culture in the organization and guide it
towards a state which is less prone towards
deficiencies. Lean tools, such as 5S and
Visual Management, were used in a practical
way to re-design the working processes to
minimize deficiencies.

The broad characteristics of the cases and the
extensive utilization of Lean throughout the
process illustrates that Lean is suitable to
improve efficiency and reduce deficiencies in
food industry warehousing operations.
Through this, the thesis further demonstrated
the usefulness of Lean in a warehousing
context.

The full study is published in the report
“Utilizing Lean Thinking to Reduce
Deficiencies in Food Industry Warehouse
Operations” at the Faculty of Engineering,
LTH, Lund University.

• author: Frohlund, Emma and Storhagen, Richard
• supervisor: Andreas Norrman
• organization: Production Management; Engineering Logistics
• course: MTTM05 20241
• year: 2024
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Warehousing, Food Industry, Errors, Deficiencies, Wasteful activities, Lean, Lean Warehousing.
• other publication id: 6019
• language: English
• id: 9164653
• date added to LUP: 2024-09-04 13:51:25
• date last changed: 2024-09-04 13:51:25