- The annual Warehousing Education and Research Council (WERC) report compares facilities' performance through measuring warehouse output with company goals, Trade & Industry Development last week.
- Respondents revealed that the data they care most about are: timely shipments order turnaround time, average dock-to-stock time, warehouse capacity in use and item picking accuracy.
- Warehousing metrics are critical for C-suite decision making, as more than 35% of warehousing managers stated that they report directly to the top levels of management, with the metric "distribution costs as a percent of the cost of goods sold (COGS)" being the most sought after data point to determine warehousing efficiencies.
Improved performance is best measured by comparing metrics to other competitors, which is why studies such as WERC's are so valuable to warehousing managers.
Measuring the accuracy of timed shipments is an excellent bellwether of warehouse achievement. Is the in-house supply chain able to meet a deadline, and do so within a prescribed amount of time? What about dock to stock? Does the warehouse receive goods when it should so that it is able to meet turnaround, and is the warehouse itself organized in a manner that best utilizes its size and space?
All of these measurements and more represent the importance of data collection and proper synthesis to understand how exactly warehousing impacts the rest of the company. However, companies who have historically not taken this data-driven approach are vulnerable to the trappings of collecting data without an idea of why they are collecting it, leading to both wasted resources and decisions based on misunderstood information. It is as important to understand why the data is important as it is to stack up well against competitors. Otherwise, the effort simply becomes score keeping in a game not fully understood.