Ship Right Warehousing Solutions experienced a 17% increase in customer demand overnight but lacked the resources to efficiently pick and stage orders. Lean Training Resources consultants optimized Ship Right's warehouse layout [1] by relocating faster moving products and grouping products ordered together, creating "supermarkets" for top customers. This reduced travel and picking times. As a result, Ship Right reduced monthly labor costs by $26,000 on average, improved on-time shipments by 11%, increased outbound pallets per hour by 1.67, and reduced customer complaints by 47%.

1. CASE STUDY
TITLE
Lean Training Resources
Lean Layouts to Reduce Warehouse Labor
Cost and Increase On-Time Shipments
Ship Right Warehousing
Solutions
“Our customer base grew 17%
overnight and we were not
equipped with engineers or
warehouse optimization software
to pick and stage orders efficiently
to meet customer demand and
achieve on-time shipments.”
~Warehouse Operations Supervisor
Executive Summary
By relocating faster moving products, regrouping products based on
new criteria, and identifying correlations between customers ordering
patterns, Lean Training Resources (LTR) consultants optimized Ship
Right’s warehouse layout to reduce travel times and order picking
times to accommodate a 17% increase in the customer demand. By
applying Lean layout techniques, the following benefits were achieved:
 Reduced monthly labor costs by an average of $26,000
 Improved on-time shipment by 11%
 Increased outbound pallets per hour by 1.67 units per hour
 Reduced monthly customer complaints by 47%
Lean Warehouse
Optimization

2. CASE STUDY
TITLE
Lean Training Resources
The Challenges
Due to a local third party warehousing
facility closing, Ship Right experienced a
17% volume increase over the course of
two months. The outbound pallet
requirement went from approximately
16,000 pallets per month to roughly 18,000.
In addition to increased demand, the
average length of service of Ship Right’s
employees was less than one year. With the
spike in demand and the low level of
experience of the employees, Ship Right’s
on-time shipping rate began to decline. The
decline in on-time shipments directly
impacted customer satisfaction and which
resulted in a rise in customer complaints.
The Solution
Through the use of Lean Warehousing
techniques, LTR consultants created a Lean
warehouse layout to reduce the amount of
travel required to pick and stage customer
orders. This was done analyzing SKU
inventory turn rates and relocating faster
moving products closer to the shipping
dock.
“With no capital budget money for
warehouse optimization software
of any type of picking optimization
software, we had to rely on Lean
Warehousing techniques to address
our shipping issues.”
~General Manager
Also, products that were frequently ordered together were stored
within the same area of the warehouse to reduce travel.
Finally, customer “supermarkets” were created for higher volume
customers. Data analysis showed that 60% of the warehouse
outbound pallet volume consisted of four customers. To pick these
orders more efficiently, the most frequently ordered products for
each of the customers were segregated into their own
“supermarket.” These four supermarkets helped to reduce the travel
time required to pick and ship orders and increased the outbound
pallet rate for Ship Right’s highest volume customers.
The Results
Over the course of four months, Ship Right was able to make
substantial improvement in on-time shipping, customer complaints,
outbound pallets per hour, and overall labor costs.
Their on-time shipping rate increased by 11% overall. The increased
on-time ship rate resulted in a 43% decrease in customer
complaints. The outbound pallets per hour increased from 24.41 to
26.09. Also, without a change in employee headcount, because of
reduced travel hours, the Ship Right generated an average of
$26,000 per month in labor savings.
With only a fraction of the investment required for warehouse
optimization software, LTR consultants helped Ship Right use Lean
warehousing techniques, to improve on-time shipping, reduce labor
costs, and increase customer satisfaction.

3. CASE STUDY
TITLE
Lean Training Resources
For More Information
For further information on how Lean Training Resources can help your company improve cost,
quality, and service, please email us at info@leantrainingresources.com or speak with our senior
consultant at 478-338-0612.