Warehouse Performance, Cost, And Value Measures

WAREHOUSE PERFORMANCE, COST, AND VALUE MEASURES

Businesses compete on the basis of financial, productivity, utilization, quality, and cycle-time performance. They are also accountable to serve their employees with a great place to work, their customers with excellent customer service, and their shareholders with excellent returns relative to risk.

1. Servant leadership. The heart of the model is service. Our model encourages serving employees with a great place to work, serving customers with excellent customer service, and serving shareholders with excellent financial performance. Accordingly, RightScores’ metrics face three way: Employee-facing metrics include safety and turnover. Customer-facing metrics include accuracy, cycle time, and on-time performance. Shareholder-facing metrics include cost, productivity, and utilization.

2. Span the flow. In a supply chain, the flow of materials, information, and money connects suppliers and customers through production, purchasing, inbound transportation, warehousing, outbound transportation, and customer delivery In warehousing, the flow typically moves from receiving, to put-away, to storage, to picking, to shipping. This flow of connected activities organizes the columns of metrics on our RightHouse Scoreboard:

 

RightHouse Scoreboard summary screen

3. Red, yellow, green. We recently completed a warehouse performance and practices assessment for the U.S. Army. The Army was pleased with all the aspects of the assessment except one—RYG. To be honest, I did not know what the acronym meant, so I asked. The representative explained that RYG is simply “red-yellow-green” and that it is a critical aspect of the presentation of the Army’s indicators. When I pressed further, the representative explained that in battle, military personnel may be trying to understand an assessment with little to no sleep, little to no food, and with bullets flying around. In trying to make good, quick decisions, under those circumstances, it is helpful to simply know if things are okay (green), in trouble (red), or somewhere in between (yellow).

4. For better or worse. Trending indicators of improving or declining performance is another useful feature in metrics presentations. We use directional arrows in each metrics cell to illustrate trending.

5. Down and down we go. Our RightHouse Scoreboard allows users to drill down to a specific warehouse, to a specific activity in a specific warehouse, and to a specific operator in a specific activity in a specific warehouse. Results are filtered by month, location, and channel of business.

6. Practice makes perfect. Warehouses perform the way they practice. Accordingly, our RightHouse Scoreboard reports a practice score for each warehouse activity.

7. Sum the whole. The metrics either add or multiply across the activities to indicate the overall performance of the warehouse.