Warehouse Performance Management

Question 1

Reasons to measure (5)

Answer 1

• customer satisfaction
• customer retention: keep cost«< find a new one
• ensure a culture of continuous improvement
• Train stuff in right area
• avoid bad performance

Question 2

Areas of measurement (4)

Answer 2

Flexibility: order cycle time (quick response and lead time)
Reliability: on-time delivery
Cost: % of sales
Asset utilization: maximize productivity

Question 3

Benefits of measuring (5)

Answer 3

1. High quality operation: eliminates redo
2. Faster operation: quick turnover of order
3. Flexible operation: quick response to customer and not affecting usual operation
4. Reliable operation: on-time delivery
5. Low cost operation: higher profitability

Question 4

Key Performance Indicators definition and main structure

Answer 4

definition:
What to do to increase overall or specific performance continuously

Structure:
Key performance area: who will be responsible for the area
Performance objectives: qualitative way to describe the service level
Performance indicators: quantitative way to describe the service level

Question 5

Traditional warehouse performance measurements area (4)

Answer 5

1. Labor, space and equipment utilization:
   - Labor hour used, space used, MHHHE utilization
2. Cost performance measure:
   - cost of a %, cost of per dispatched
3. Productivity measures
   - unit picked per hour, dock to stock time
4. customer service measure
   - on time delivery, order accuracy

Question 5

New warehouse performance measurements (13)

Answer 5

1. on time and in full delivery
2. perfect order
3. stock cover in days (avg./total sales) (longer –> excess or slow)
4. stock turnover (total sales/avg. stock)
5. inventory accuracy
6. damage inventory (within WH/ during dispatch)
7. cash-to cash cycle time (how long to convert investment into cash) (days of inventory supply + AR - AP)
8. cash spin (reducing assets through collaborating)
9. inventory days of supply
10. dwell time (in time, not %)
11. on-shelf in-stock percent: product is available on shelf for sale
12. supply chain total cost
13. supply chain response time: how long to take all activities ready