Warehouses

Warehouses are organized storage locations. They can store both finished goods or raw materials and components. While some warehousing can be unavoidable, in general, these types of storage facilities go against most Lean principles.

Raw materials and components should be ordered just-in-time and stored at the point of use. If this is done properly, there is very little need to store vast quantities of materials in a separate location. The processes involved in storing these materials, and the transportation to where the part is eventually used all add waste to processes. It is far better to move materials from the shipping dock directly to the work area where it will be used.

As far as finished goods go, again, warehouses tend to be un-Lean. The fact that you need to store large quantities of finished goods means that you are building before you have orders. There is no pull. Even if you sell commodity style goods, your goal should be to keep as little finished goods inventory in stock as possible. A small amount to manage fluctuations in demand is acceptable, but unless you are producing thousands of SKUs, you probably do not need a warehouse.

Of course, if you are a retailer, especially one who does a lot of business through online sales, a warehouse is an essential part of doing business. You should still adhere to Lean principles as much as possible, though.