ANNUAL SURVEY AND REPORT ON INDUSTRY METRICS

DC Measures
2021 Snapshot in Time
COMPLETE 2021
“Be open to adjustments. There’s nothing about this current moment DC MEASURES
in history that allows for stubbornness.” –Unknown REPORT AVAILABLE
ONLINE AT
WERC.ORG
Everyone has a plan until they get punched in the mouth.” –Mike Tyson

Top Measures for 2021

T he two quotes above provide a great characterization

of 2020 moving into 2021. COVID-19 was a punch in the
face for the supply chain industry as the global pandemic
demonstrated incredible agility and flexibility, and delivered
the goods society needed to live and remain as safe
and healthy as possible. We salute you, supply chain
created havoc through unprecedented demand; bottlenecks professional, for the incredible work you have accomplished
in production, distribution and transportation; and intense and continue to do.
variability in demand patterns. Supply chains staggered Continued >>
in the first few rounds of 2020, but eventually got their
bearing and regained momentum through intense focus,
collaboration and flexibility.
COVID-19 was a punch in the face for
Unprecedented times have provided unprecedented
opportunities for supply chain professionals. Fortunately, the supply chain industry as the global
with the global spotlight shining on the supply chain
industry, supply chain professionals rose to the occasion, pandemic created havoc through
showed up to work every day as essential workers, unprecedented demand.”

WERC Thanks These Study Sponsors:

Warehousing Education and Research Council // 1100 Jorie Boulevard, Suite 351 // Oak Brook, IL 60523
P 630-990-0001 // F 630-990-0256 // wercoffice@werc.org // werc.org
 As we wrote the 2020 DC Measures study, we watched in
real-time the impact that shutting down countries were
having on global supply chains. Our expectations for the
2021 study were for even more change, possibly moving
from customer-focused measures to more capacity-
focused measures with the current COVID-19 pandemic
taking more precedence in how facilities respond to the
maelstrom of global supply chains. Sitting back a year later,
perhaps our expectations were overblown.
LEADERSHIP PUTS A PREMIUM ON PERFORMANCE
This year, senior management’s interest in the metrics
study remains quite high. 32.4% of respondents indicated
they report directly to the “C Suite” and/or the Board of
Directors. This is the same as last year.
DIVERSE INDUSTRIES, OPERATIONS AND FIRM SIZES
The total number of individual responses for 2021 was 345.
Since not every question was answered and to increase the
predictive powers of the benchmarks, responses from 2019
and 2020 were added to this year’s data set after validating
that there were not significant differences between the
three years. The largest group of respondents reported
their title as Manager (40.6%), while Director (29.9%) and
Senior VP (20.7%) were the second and third largest groups.
C-Level executives represent 5.0%, a 32% increase from the
2020 study.
Transportation Service Provider 1.2%
Retail
15.8%
Wholesale/
Distributor
29.0%
Figure 1.
Manu-
Respondents by
facturing
Industry 18.5%
Utilities/
Government
1.9%
Third-party
Warehouse
Other 23.9%
5.8%
Life Sciences – Medical Devices 2.7%
Life Sciences – Pharmaceuticals 1.2%
WERC DC Measures // 2021 Snapshot in Time
INDUSTRY TYPE
Figure 1 provides a breakdown of the various business
segments that participated in the study. Overall shifts by
industry were relatively small compared to prior years.
Wholesale/Distributors remain the largest segment by
industry, representing 29.0% of the respondents. Third-
party Warehouse respondents represent the second largest
industry group in the study. Once the dominant force of
respondents in the study, Manufacturing continues its slide
down, representing 18.5% of respondents. Retail remains in
fourth place, representing 15.8% of respondents.
Overall shifts by industry were relatively
small compared to prior years. Wholesale/
Distributors remain the largest segment
by industry, at 29.0% of the respondents.”
HOW DO YOU PICK?
The majority of facilities (73.0%) are picking cases rather
than pallets. In calculating percentages for the type of work
performed, we only used responses where a majority of the
respondent’s activity was in one of the four classifications.
Compared to 2020, broken case picking (or piece picking)
continued its growth as the majority type of distribution
operation. As more consumers and end customers place
smaller orders more frequently—using e-Commerce tools
such as online and mobile—we expect this trend to increase
considering the pandemic and overall behavioral changes in
consumers. The losses this year were to full pallet, declining
13.8% from 2020. A number of factors could be impacting
this, especially with the delays affecting imports over the past
year. We suspect this caused more import and regional DCs
to shift to partial pallet picking to keep store shelves stocked
as a response to the lockdowns in March 2020. Partial pallet
picking is up 14% from 2020.
WHO DO YOU SERVE?
Another important consideration is the location of the
company within in the supply chain. We were curious to
learn if companies that are upstream suppliers used a
similar set of measures to that of their customers or of their
customers’ customers. Respondents were asked to classify
their primary customers in the supply chain (Figure 2).
In past studies, a majority of respondents have been at
or near the end of the supply chain—providing products
to end consumers either directly or through a store. This
year, however, we are seeing a plurality of respondents
near the end of the supply chain. 49.8% report a primary
customer of either a Retail Firm or End Consumer. While
 Figure 3. Respondents by Business Strategy
60%

Manufacturer
17.6% 50%
End
Consumer
25.9% 40%

30%
Figure 2.
Respondents by 20%
Type of Customer
Distributor/ 10%
Wholesaler
32.6%
Retail Firm 0%
23.9% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Cost Leadership Product/Market Innovation

Customer Service Mix: Be All Things to All People

not a seismic shift, the small changes that did occur were
respondents moving away from supporting a Manufacturer
to Distributors/Wholesalers. Distributors/Wholesalers as a
primary customer increased 4.2%. Manufacturers declined
another 4.5% as a primary customer in 2020.
HOW ARE YOU COMPETING?
Business strategy impacts a facility’s performance in a
number of ways. Cost Leadership reflects an importance
on volume movements and reducing costs. Innovation
strategy is focused on velocity by creating new or refreshed
versions of products and services on a specific time cycle.
Customer Service values veracity (or doing what we say
we’re going to do). The Mix strategy strives to be cost and
customer focused while being innovative at the same time.
Each strategy requires a different set of measures to know
whether the facility is successful at achieving the vision of
the organization.
To determine the effect business strategy has on performance,
we asked respondents to indicate the overall business strategy
for their business unit or division (Figure 3). The movement
between strategies over the years is interesting to watch.
Business strategy allows us a glimpse into the minds of
executives and boards and how large of a net are they
trying to cast. Cost Leadership has maintained a steady
pace over the years. This year, those reporting that they
follow a Cost Leadership strategy has evened out, slightly
up from 14.5% in 2020 to 14.9% of respondents this year.
Customer Service is still the most used strategy again this
year, with 40.8% of respondents (though it is just a bit lower
than in 2020). The Mix strategy lost some of the ground it
gained in the prior study, down to 38.4% from 2020. The
surprise is Product/Market Innovation, increasing over
17% to represent 5.9% of respondents. The Innovation
strategy gained back most of what it lost in 2020. This is an
interesting development to watch, as either we gained new
respondents to the study, or some respondents thought
that the implementation of new technology to combat the
pandemic constituted being innovators.

In past studies, a majority of respondents

have been at or near the end of the Figure 4. Respondents by Company Size

supply chain—providing products to end Greater Than $1 Billion

2021 24.3%
consumers either directly or through a 2020 22.5%

store. This year, however, we are seeing $100 Million – $1 Billion

2021 46.1%
a plurality of respondents near the end of 2020 45.0%
the supply chain.” Less Than $100 Million
2021 29.6%
2020 32.5%

Warehousing Education and Research Council // 1100 Jorie Boulevard, Suite 351 // Oak Brook, IL 60523
P 630-990-0001 // F 630-990-0256 // wercoffice@werc.org // werc.org
WHAT ABOUT SIZE?
Once again, companies of all sizes are participating in
the study, supporting our philosophy that they should
benchmark and focus on performance regardless of their
size. Companies with annual sales less than $100 million
comprised 29.6% of our respondents, down 9% from 2020.
Participants having greater than $1 billion in annual sales
increased 8% from 2020 to 24.3%. Those companies
reporting annual sales between $100 million and $1 billion
represent the largest group at 46.1% (Figure 4).
WHAT TYPE OF FACILITY ARE YOU?
Regional, Omni-Channel, Centralized and Wholesale
facility types make up the top four types of facilities in the
study. In addition, we provided further clarification for what
an Omni-Channel facility is in the survey. Thus, the increase
in the number of respondents reporting their facility type as
Omni-Channel (Figure 5).
Import 1%
Centralized
Local 7% 15% Regional
22%
Figure 5.
Type of DC or
Warehouse
Wholesale
15%
Omni-
Channel
30%
Grocery 4%
e-Commerce 6%
FACILITY LOCATION?
As more warehouses and DCs outside of North America
continue to report their findings, we will be able to provide
statistically viable benchmarks based on location. This year
92.8% of the respondents reported North America as their
location, while the remaining 7.2% of respondents are from
countries outside of North America.
TOP METRICS: CUSTOMER AND CAPACITY FOCUSED
Each year we identify the Top 12 most popular measures
based on the number of respondents to report results for
each metric. Table 1 shows the Top 5 of 12 most popular
WERC DC Measures // 2021 Snapshot in Time
TABLE 1. TOP 5 OF 12 METRICS FOR 2021
Metrics Category 2021  2020 
Average Warehouse Capacity Used Capacity 1 1
Order-picking Accuracy
(Percent by Order)
Quality 2 3
Peak Warehouse Capacity Used Capacity 3 5
On-time Shipments POI/Customer 4 7
Percent of Orders with
POI/Customer 5 4
On-time Delivery
*Indicates a tie. POI = Perfect Order Index
metrics used and how that has changed since the 2020
study. This year’s most frequently employed metrics were
Average Warehouse Capacity, Order-picking Accuracy and
Peak Warehouse Capacity Used, suggesting that space
utilization is still an important factor to manage in a world
shifting to e-Commerce shopping.
Overall, the number of measures employed to focus on
the customer continues to play a dominant role in the Top
12. This is primarily led by the Perfect Order Index (POI)
component measures, such as On-time Delivery, Damage
Free, Correct Documentation, and Complete. While there
was a short reprieve by retailers to their suppliers on
meeting On-time and In-full service level agreements (SLAs)
due to the pandemic, it appears it was very short lived.
However, the lack of balance will likely come back to bite in
the coming years.
One thing we heard a lot about was the need for employees
in warehouses. A number of different companies with
whom we have discussed performance over the past year
described workforce issues in terms of finding any talent to
work. Part of this is being able to keep employees healthy,
as a number of companies experienced worker shortages
due to sickness from COVID-19. The pool of available
workers has also shrunk. This year we have no employee
measures in the Top 12.
Damages appear to be on the uptick for facilities both in
receiving and shipping. Both of the measures in the study
related to tracking damages are in the Top 12 this year.
Finally, On-time Shipments continues to do the two-step,
jumping from seventh place to fourth this year. There
was some change in performance as Major Opportunity
performers saw a small decline of -1.5% from 2020.
Considering changes in performance from year to year,
only small gains were made. In terms of performance
improvement this year, Major Opportunity took the lead
again, improving performance on nine of the 37 measures.
Median performers improved performance on six of the
measures. Bringing up the rear, again, are Best-in-Class
performers, who improved performance on four measures.
Table 2 is a summary of the Top 5 metrics in this study. • Typical: Responses in the 40-60th percentile
Column 1: Metric Being Examined (metric definitions can • Advantage: Responses in the 60-80th percentile
be found on pages 9–11 of the full DC Measures report). • Best-in-Class: Top 20% of responses
Columns 2–6: Quintile Rankings Column 7: Median (the actual median performance
• Major Opportunity: Lowest 20% of responses of all respondents).
• Disadvantage: Responses in the 20-40th percentile

TABLE 2: QUINTILE PERFORMANCE CLASSIFICATION FOR TOP 5 METRICS

Column 1 Column 2 Column 3 Column 4 Column 5 Column 6 Column 7

Customer Metrics* Major Opportunity Disadvantage Typical Advantage Best-in-Class Median

>= 75 and >= 80 and >= 86.18 and

1. Average Warehouse Capacity Used Less than 75% >= 92% 85.00%
< 80% < 86.18% < 92%

>= 97.96 and >= 99.06 and >= 99.7 and

2. Order-picking Accuracy (Percent by Order) Less than 97.96% >= 99.9% 99.50%
< 99.06% < 99.7% < 99.9%

>= 85 and >= 90 and >= 96 and

3. Peak Warehouse Capacity Used Less than 85% >= 100% 95.00%
< 90% < 96% < 100%

>= 92 and >= 96.6 and >= 98.942 and

4. On-time Shipments Less than 92% >= 99.7% 98.00%
< 96.6% < 98.942% < 99.7%

>= 90.24 and >= 95.1 and >= 98.4 and

5. Percent of Orders with On-time Delivery Less than 90.24% >= 99.26% 97.30%
< 95.1% < 98.4% < 99.26%

Legend: > greater than; >= greater than or equal to; < less than
*Note: Average and Peak Warehouse Capacity does not always reflect best practices. Due to the calculations for quintiles, we have continually reported that best in class is above 90%. A
high average warehouse capacity is not beneficial; studies have shown that an average warehouse capacity between 80 and 85% allows the warehouse to respond to shifts in demand.

About the Study

WERC Thanks Its Research Partner:
2021 marks the 18th year of the DC Measures study. The heart of this study is to eradicate bad warehousing practices. Every
January, the survey is launched via an email invitation to WERC members and DC Velocity readers. Survey participants are asked
to report their actual levels of performance for 2020. The study captures 37 key operational metrics that are close to the heart of
most distribution center professionals. The measures have been grouped into five balanced sets—customer, operational, financial,
capacity/quality and employee—plus the additional set related to cash-to-cash cycle measurement.

About the Researchers

JOSEPH TILLMAN KARL MANRODT, Ph.D. DONNIE F. WILLIAMS, JR., Ph.D.

WERC Researcher Professor of Logistics Clinical Assistant Professor
Founder, TSquared Logistics Director, Master of Logistics and Supply Department of Supply Chain Management
Chain Management Online Program
Certified in Transportation and Executive Director, Supply Chain Management
Logistics (CTL) by AST&L J. Whitney Bunting College of Business Research Center
SCOR-Professional Certified Georgia College & State University Sam M. Walton College of Business
by the Supply Chain Council
University of Arkansas
Using DC Measures Effectively
RESOURCES FOR BENCHMARKING 2021

2021 DC Measures
Begin by identifying the quantitative metrics your operations will focus on and noting how your facility ranks
compares to others. Are you tracking the metrics that will produce the best return for your company?
The full study report captures 37 key operational metrics that are most meaningful for distribution
professionals. The measures have been grouped into sets–customer, operational, financial, capacity/quality
and employee/safety, perfect order, and cash-to-cash cycle measurement. There’s a list of definitions for each
metric AND how to calculate each. Used from year to year and across your network, these details provide a
strong base and consistent approach to reporting performance.

2021 DC Measures Comparative Report

This is a customized report for your company based on the most current DC Measures data. WERC researchers will work
with your team to develop an interactive tool to compare your data to six different demographics from the DC Measures
study (Business Strategy, Sales, Industry, Operations, Facility Type, Customer Served). You’ll receive a color-coded Excel
worksheet for visual impact.

Warehouse Manager’s Guide for Benchmarking, 2nd Edition

This publication explains the kinds of benchmarking, why it’s important to benchmark, how
to choose the right metrics, how to analyze your company’s performance, and techniques for
communicating to get the results you need. Additionally, you’ll find methods for tracking and
communicating plans and progress to others. Consider it a road map as you plan for the future.

Warehousing and Fulfillment Process Benchmark & Best Practices Guide, 2nd Edition
Complementing the DC Measures report is this 3-ring binder that explains qualitative warehousing
best practices. It can be used as a workbook to rank your operations against industry standards in
eight specific process areas using a quintile format similar to DC Measures. Use it to complete your
overall performance improvement program for maximum benefit.

WERC Warehouse Assessment and Certification Program

In full cooperation with your team, the WERC assessor comes to your facility to assess its capabilities and
performance on core warehousing functions. The review is based on well-vetted industry standard-grading
methodology by independent certified auditors who benchmark your warehouse operations against a 5-point
scale. In a presentation scheduled by you, the researcher explains the process, outlines your specific results,
holds a workshop with your team that includes suggestions for improvements and leaves your team with a
beginning action plan.

VISIT
WERC.ORG FOR
ORDERING
INFORMATION
Why WERC?
In an increasingly complex world, warehousing, distribution and fulfillment professionals make
sense of things, so that people get their products and services, companies deliver on their
commitments, economies grow, and communities thrive.
WERC powers distribution logistics professionals to do their jobs, excel in their careers, and
make a difference in the world.