Key performance indicators – KPI’s – are frequently used in general business to evaluate the success of everything from a specific department to an entire enterprise. They focus on strengths and weaknesses. Many warehousing KPI’s tend to be focused on external performance, such as on-time shipments that directly impact customers. This is a good measure, but the need to go deeper and measure the factors that drive those success rates is critical. What are some KPI’s for warehousing operations?

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Earlier this year, Food Logistics published a provocative article, “Automate or Die”.  Do you have to automate? Of course not. But it brings to mind a good question: where is the point of acceptable ROI for automation projects? When does it make sense? What aspects are potential pitfalls?

We’re  inside warehouses, distribution centers, commercial operations, and manufacturing facilities every day. We don’t see full scale automation in all — or even most — of these operations. We’ve even seen some companies who have automated go back to picking with carts. We’ve seen others thrive due to their automated projects. The point is, you certainly won’t “die” if you don’t automate. But that doesn’t mean that you should not automate some or all aspects of your operation.

In some cases, we try to make the case that automation isn’t needed. In others, we try to help these companies understand when a capital investment in automation equipment and/or software will save money, increase productivity, reduce problems, and improve their business. It’s not  something that you can do from a distance.  It requires a command of the facts on the ground, in the servers, and throughout the supply chain.

So, the question is, why automate? 

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There is some confusion about the different finishes that can be applied to a pallet rack wire deck.

Various manufacturers offer different finishes, and you may have need of more than one of them for different types of storage applications. This primer on the common finish options can help you make decisions about your warehouse, load, rack and application.

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The warehouse. The office.

Sometimes it’s as if one doesn’t exist to the other. As one of our customers told us, “it’s like we have two companies here, and one doesn’t know what the other is up to.”

But when you’re trying to operate better, it’s impossible to separate the two functions. Decisions can be made in one area that can impact the other severely, so communication and cooperation are vital. Too bad it doesn’t always work that way. How can you improve it?

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In a recent blog post, Auburn professor Dr. Kevin Gue, one of the bright minds in the industry when it comes to the business of industrial distribution and plant operations, reflected on the reaction to his ProMat 2013 talk on “Designing a Worker-Centric Facility”.  Gue has smart points about the relationship between safety and ROI – and how you can deal with those issues.

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Comparison is natural – and necessary

Everyone likes to see how they’re doing vs. their industry peers.  This isn’t just a natural urge to compare yourself, it’s a vital part of doing business.

Benchmarking, at the heart of it, is comparing your performance to others like you. You look at your business processes and outcomes, and how they stack up to the performance metrics of industry leaders, your peers, and the best from similar operations. In warehousing, it is particularly important to understand where you are, and where you could be with reconfigurations, tweaks, and innovations that others are using to improve their numbers.  What do you specifically measure? Typically this can include quality, cost, and time. Specifically, it can get much more complex.

At the end it helps you understand the success of your peers and how you can reproduce that success.

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We see two kinds of operations that have utilized AisleCop® forklift safety gate systems. The first are those companies who have defined traffic plans and are looking to prevent possible accidents in high-risk, limited-visibility, or heavy-traffic aisles. They foresee potential accidents and are taking measures to prevent them. The second kind are companies who have had an incident, or a near-miss.

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In the last two decades, smart companies have identified the warehouse operation as a profit center, not a cost center. This is far from universal, but it inches toward that every day. No longer are warehouse managers considered box-hustlers – at least not in smart companies. Many are utilizing varying levels of automation. WMS is standard for larger operations and is making its way even to single-building, midsize and smaller ones.

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It’s important to control costs in your operation. What are some warehousing cost-cutting methods you can employ that don’t require extensive investment or re-tooling? Most of the costs of warehousing operations fall into the following categories:

• People
• Real Estate, Utilities & other Fixed Costs
• Inventory
• Technology

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Over at the Operations & Fulfillment site, Curt Barry has written a brief, informative piece on reducing warehouse costs. In particular during a difficult economic climate, cost reduction is at the top of mind for distribution operations.

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