Case Study: Increasing Efficiency Of Warehouse Operations

The challenge of responding to the threat of cheap offshore labor is not new to North American businesses. Nearly a hundred years ago, Henry Towne wrote about the need for increased efficiency and productivity:

"We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference with them by the products of the cheaper labor of other countries. To maintain this condition, to strengthen our control of home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products of other industrial nations, we should welcome and encourage every influence tending to increase the efficiency of our productive processes."

Efforts to improve efficiency over the past century have often focused on the reduction of waste, defined as processes and resources that represent direct costs and opportunity costs but do not add any value.

The elimination of muda, the Japanese term for waste, is at the core of the Lean Manufacturing management philosophy promoted by Taiichi Ohno, the father of the Toyota Production System, also known as "Just In Time". He listed "the seven wastes" – defects, transportation, human motion, waiting, inventory, overprocessing and overproduction – and an eighth waste, underutilized skill, was later added to the list.