Lean Management in a small warehouse – does it make sense with 5 employees?
In October 2023, we entered the warehouse of a wholesaler in Gdynia where five employees covered an average of 12 kilometers on foot every day. They were looking for stretch film, cutters, and empty pallets. The owner was thinking about expanding the hall, but we proposed something that cost 487 PLN spent at a hardware store.
Where did 127 minutes a day disappear?
We started with a simple measurement with a stopwatch in hand. For 4 hours, we observed the work of Mr. Marek and Mr. Darek. It turned out that just looking for a working pallet wrapper took them 14 minutes for every shipment. The 320-square-meter warehouse was cluttered with empty cartons that 'might come in handy someday'. It wasn't a lack of space; it was a lack of clear rules. Numbers don't lie – they were losing 27% of their time on movements that brought the company zero profit.
In small companies, there is often a belief that optimization is for large car factories. That's a mistake. At Baltic Strategy & Development, we see this every day. If you have 5 employees and each of them wastes only 15 minutes a day, on a monthly scale, you are paying for 25 hours of idle work. At a rate of 34.50 PLN gross per hour, you are throwing over 860 PLN per month per person into the trash. In Gdynia, these losses were three times higher because no one knew where to park the forklift after a shift.
The problem was that the receiving zone was mixed with the dispatch zone. Couriers got in the way of employees picking goods. On average, every 42 minutes someone had to stop working to let a pallet jack through. This generated unnecessary stress and shipping errors. In 2023, the company had 19 claims resulting from sending the wrong goods. Each such mistake costs about 148 PLN for re-transport and office time to fix the issue.
5 steps for 487 PLN
Instead of buying an expensive WMS system for 43,000 PLN, we used adhesive tape in three colors, whiteboards, and markers. The 5S method sounds fancy, but in practice, it's just cleaning with purpose. On the first day, we threw away 214 kilograms of trash and unnecessary clutter that had been lying against the walls since 2018. The employees turned up their noses at first because 'we know where everything is'. But when they didn't have to move three pallets in the morning to get to the electronics rack, they changed their minds.
We designated fixed places for tools. If a box cutter has its shadow painted on the board, it's immediately obvious it's missing. This cuts unnecessary movements in the warehouse to zero. The second step was placing the most frequently rotating goods closest to the exit gate. Previously, the most popular connectors were at the very end of the hall because it was convenient to put them there during delivery in March. Now, 82% of orders are picked within a 12-meter radius of the packing station.
Every rack got its own number, and every shelf a clear description. We don't use complicated codes that no one remembers. We wrote it in simple language so that a new employee would know where to look for goods after just 34 minutes of training. Thanks to this, the onboarding time for a new person was reduced from 5 days to just 7 hours. This is a concrete plan instead of theory, which has proven successful for 94 clients we served in the last quarter.
Don't look for stretch film for 10 minutes. Designate a place for it and make sure it stays there. It's pure profit.
Effects you can see in your wallet
Three weeks after the changes, we took measurements again. The preparation time for one order dropped from 48 minutes to 26 minutes. That's a saving of exactly 22 minutes on every package. With 18 orders a day, that gives over 6 hours of recovered time for the entire team. The company owner didn't have to hire a sixth person for the pre-Christmas season, which he had planned to do back in September. He saved about 5,400 PLN per month on salary and contributions alone.
Importantly, the number of errors dropped. Since the implementation of the new rules in October 2023, the company recorded only 2 shipping mistakes. Previously, it was an average of 4 per month. Customers are more satisfied because goods leave faster. The average time from clicking 'buy' to releasing the package to the courier is now 2h 47min. Previously, it was nearly 6 hours. In today's trade, speed is the only advantage small players have over giants.
Perhaps you think your company is too small for such 'fancies'. Remember that order costs almost nothing, while mess costs you several thousand PLN a year in hidden losses. Baltic Strategy & Development does not promote complicated solutions. We simply check where your money is leaking and plug those holes. In Gdynia, 5 days of our work was enough to transform the daily routine of a five-person team.
Numbers don't lie: after 5S implementation, packing time dropped by 46 percent without purchasing new machines.
