Despite it usually being largely hidden from view to all but a relatively few employees in a business, the warehouse is an essential element to the smooth running of most enterprises.
Nowadays, businesses are fond of applying the concept of KPIs, (Key Performance Indicators) to each element of their organisation, with a view to assessing their level of performance, efficiency and overall contribution to the business as a whole.
Here are some headline examples of KPIs which could usefully be measured in the warehouse operation of a business:
Utilisation of the available space and resources
This involves rather more than just installing the latest in warehouse shelving or racking, it involves. For example, ensuring that those items that are moved the most frequently are stored in the most accessible way in order to save time when picking, moving and replenishing.
One important part of the whole supply chain management process in the speed with which stock can be replenished. Does the process take into account supplier lead times and seasonality? Does the system in use, manual or computerised, recognise trigger points for re-ordering so that the item is never in an out-of-stock situation with a long lead time?
Wastage and damage
Obviously this varies from business to business. Some warehouses in which perishable or date-sensitive products are stored need more sophisticated picking and stock rotation procedures in order to avoid waste. Other waste, due to damage or mishandling, can often be improved with better training,
e.g. in the operation of warehouse equipment such as fork lift trucks and by having a well thought out process of fork lift truck driver training.
Wastage does not only refer to damaged or out-of-date stock however. Other forms of waste include inefficient use of warehouse resources, including of course, warehouse personnel. If the forklift operator is sick or on holiday, can someone cover for him/her – is there a need for forklift truck driver training so that such shortfalls can easily be covered?
Then there are packaging materials; are these being recycled at every opportunity in order to improve the efficiency of the enterprise with regard to environmental issues?
Safety and maintaining a healthy environment in the warehouse
We’ve all seen the horror stories which occur when a warehouse or stockroom is badly run with regard to standards of health and safety. Faulty shelving, badly stacked products, too much weight badly distributed on a shelf and staff using equipment incorrectly. A forklift truck driven by an untrained or badly trained individual is a very dangerous thing – both for the operator and for those working with or near him/her. There’s also the very important area of materials handling – are the warehouse staff trained to handle products safely and efficiently in order to reduce accidents in the warehouse?
Some materials used in the warehouse may have to be disposed of in different ways. Some are recyclable whereas, currently, others may not be. Some may be toxic or harmful to the environment and wildlife if not disposed of correctly – are all these concerns being addressed. C02 emissions are a major concern and procedures such as the burning of waste materials are usually strictly controlled – does your organisation fully conform to such legislation and guidelines and are there procedure is place to monitor this?
Heat, of course, is an expensive commodity and is often difficult to provide properly in a warehouse due to the nature of the business and the products stored. If heating is installed is it regularly maintained to ensure both safety and efficiency of operation? Are the warehouse staff provided with suitable clothing in cases of low temperature working?
On the subject of clothing, are the warehouse staff equipped with clothing to minimise injury if an accident does occur? High visibility clothing, gloves, head protection and protective footwear are all important considerations and a failure to meet regulations with regard to these could be disastrous, not to mention expensive, for the business if an accident or other mishap occurred.
The matter of fire prevention is also an important one in many businesses which handle products that are highly flammable. Even in cases where the stock is not particularly flammable the packaging very often is. Does the organisation have measures in place to ensure the correct operation of fire extinguishers, fire blankets and other safety equipment. Are the fire exits clear from obstruction and in good working order? Is there a well-planned evacuation procedure in place, complete with a designated assembly point in case of evacuation, and are there adequate first aid facilities available. It is normal to have someone appointed as a “fire officer” to deal with roll call and at least one person trained in first aid.
What else could your KPIs indicate?
Other key performance indicators could include aspects of financial contribution to the business. Is the warehouse a profit centre or a cost? In either case, is the contribution it makes being correctly assessed?
There is a great deal of pressure placed on most businesses to outperform the competition in terms of cost and delivery time. This is especially true of online businesses where people can place an order 24 hours a day and expect similarly responsive delivery performance – only possible if the supplier has their warehouse efficiency well and truly under control.
So, if you haven’t already done so, take a trip around your warehouse or storage facilities as soon as possible and try to attribute a KPI to as many aspects of it as you can. When you start to measure and compare results you might be surprised at how efficient your warehouse operation is – or maybe a different kind of surprise awaits!
Improving warehouse efficiency is usually a combination of good procedures, correctly implemented and monitored. Training and regular assessment of staff is also vital – equipment in the wrong, or untrained, hands can be dangerous and expensive.
There’s never been a better time to evaluate your warehouse efficiency than right now, today – a small investment in expertise can often be rewarded many times over.
To improve warehouse efficiency and ensure health and safety in the workplace, please call 01438 222157 or email firstname.lastname@example.org.