Stow It for Less
Absolute productivity has declined in many companies in recent years.
Indeed, in conducting our benchmarking surveys (which we’ve done since 1996), we’ve discovered that many metrics, such as orders processed per full-time warehouse worker, have remained flat, while dollars of sales processed per warehouse square foot have declined. In turn, labor rates have increased from an average of $5.50 to $10.50 per direct labor hour.*
To help you boost productivity at your catalog, I’ll focus on the warehouse audit process and the application of a few key warehouse success factors.
An Operations Audit
When trying to reduce costs and boost customer satisfaction and profits, first measure and analyze what’s currently being done. To determine if your warehouse operation in particular is as efficient as it can be, start with a warehouse operations audit. Such an audit takes a quantitative and qualitative look at your fulfillment operation’s productivity and accuracy, and does so in a systematic way.
A good operations audit enables you to measure warehouse productivity and other important metrics to identify patterns and trends. It also allows you to complete both internal and external comparisons. Once you gather the data and make comparisons, you’ll be able to draft an action plan for improvement.
Unfortunately, there isn’t a fail-safe, textbook approach to an operations audit. Many companies employ an independent resource to conduct the audit for an unbiased and independent perspective. (For more, see “How to Select a Fulfillment Consultant,” below)
The audit should consist of a method for evaluating your own operation against a set of internal expectations, as well as external, industry-accepted, best practices and averages (outlined below). Remember, you can’t improve something if you don’t measure it.
Using a template — that is, a list of predetermined key evaluation points — for each area of your warehouse can aid in the audit’s organization. Focus on labor, facilities, systems and workflow procedures. By analyzing your operation against your existing expectations, you can develop a basis of measurement for future actions.