Warehouse and Distribution Science

Click to edit Master subtitle styleMeasures Warehouse Performance

Chapters 14 - 15

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Activity Profiling

Chapter 14

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ABC Analysis
80-20 Rule Ranking by $-volume is financial Ranking by labor or space needs is operational Often find surprises in examining warehouse activity

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ABC Profiling

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Statistical Analysis
Data Needs

Sku data Order data Warehouse location data

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Sku data
May reside in different databases When in doubt get it all ID, description, product family, address of storage

locations, dimensions, Sku packing, date introduced, maximum inventory level data

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Order Data
Order ID, Skus, customer, special handling,

date/time order picked up, quantity shipped accurate, but

Order data is financial information and usually Not necessarily operations focused, e.g. date ordered,

not date picked

Validate with lines shipped each day Very large quantity of data

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Warehouse Layout & Location

Least standardized Blueprints, sketches, CAD files

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Issues with Profiling

Getting the data Data mining Discrepancies in the data Validating Interpreting patterns Beware of small numbers Beware of sample biases E. Tuftes The Visual Display of Quantitative

Information

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Benchmarking

Chapter 15

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Benchmarking
What to measure? With whom to compare? How to improve? Compare a warehouse with similar warehouses. Examine its facilities and processes to adopt if better

performing.

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Performance Measures
Units of output achieved/Units of input required Operating cost (cost as % of sales) Operating productivity (picklines, orders, etc. per

person hour)

Response time (order-cycle time) Order accuracy (% of shipments with returns)

Advantages/disadvantages of these measures?

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Benchmarking
Comparing warehouse with other warehouses Internally or externally Ratio-based benchmarking Aggregate benchmarking Data Envelop Analysis

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Convex combination Efficient Frontier

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Fit a

Pick rates at similar warehouses

regression line for size versus average picks per personhour. larger warehouses are less

Regression Line

Generally,

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Conclusions of GT Study
There was no difference between union and non-

union warehouses.

Warehouses with low capital investment tended to

outperform those with high capital investment. Inflexible automation. warehouses.

Smaller warehouses tended to outperform larger

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Are smaller warehouses more efficient?

Pure size hurts efficiency Size requires process changes E.g. Walmart

Changed the smallest quantity handled, from eaches to cartons, etc. Utilize cross-docking to eliminate double handling.

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