Measures of Warehouse Productivity
The warehouse is the heart of the wholesale distribution system. It is the place where the goods first arrive, are stored, packed, and then transported to various outlets for sale. Keeping track of the inventory in constant motion can make or break the entire business. Errors in warehouse operation can undermine operations resulting in customer dissatisfaction and financial disaster, a sure death knell for the business.
Companies that relentlessly measure sales, customer service, financial, and other functions sometimes treat their shipping and handling operations as an afterthought, which is unfortunate, because the warehouse is where tremendous value can be added to the process. Since it’s often the very last buffer between you and your customers, its role in customer satisfaction can’t be overstated. Product should flow in, store, process, and flow out with a minimum of “touches” by human hands and processes. To get to that state, you have to break down the processes. What can be improved? What should be revamped? Do you know what the industry standards are? What are your competitors and peers measuring?
Typically in broad terms, we’re discussing productivity, quality, errors, time, and costs. But the specific processes that feed these measures are what’s important. In warehousing, your costs are mostly based on labor, space, and operational equipment.
Improving Warehouse Productivity
Efficient warehousing operations are vital to a firm’s competitiveness in today’s global environment. Industrial operations management techniques can be gainfully employed to optimise your operations and maintain high productivity levels.
As businesses evolve, a number of inefficiencies get embedded in the processes and systems of the firm. Make a deliberate effort to constantly review the processes involved in your operations and carry out optimisation. Focus on efficiency and eliminate delays and bottlenecks that hamper workflow and increase processing time. This helps in reducing operating costs, improves capacity utilisation and improves quality and service levels.
It is very important to train employees for achieving and sustaining productivity levels. It yields consistent results and improves the product quality. Trained employees follow proper methods and procedures while doing their tasks. This leads to higher productivity levels. More importantly, these levels are then sustained over time. In addition, training provides management with an effective tool to evaluate associates who have been brought up to a common level.
Labor Standards Measuring
Multiple variable work functions evolve with these standards. Working with operators who perform these tasks on a daily basis, engineers carry out time studies and workload information to calculate completion rates of various tasks. Productivity standards for various work functions are then compiled. This is much better than having standards based on theoretical calculations. It is a good performance measurement tool and forms a valid basis for feedback and implementation of incentive programs.
This is an essential part of any operation and provides managers with essential quantifiable data about the efficiencies of the system. It forms the basis of all activities to sustain productivity over time. A productivity tracking system is generally put in place. It generates reports and data that are used to evaluate performance, implements incentive programs, and monitors productivity. Software has the capability to provide operational performance data across various departments and functions down to individual employees. It is particularly useful as the charts and graphs outputted by the system give a graphic view of the health of the operation.
The way of ensuring that your operation is functioning at optimum levels is to constantly carry out process optimisation, have engineered labor standards, productivity measurement, and training of employees. This will result in a substantial cost reduction and operations that are more streamlined. Focus on efficiency. Avoid delays and bottlenecks that hamper the workflow and increase processing time.