Do you believe that knowledge is power? Imagine how great it would be to know the next winning lottery numbers! That would be awesome, right? Unfortunately, this is just a wishful thinking. In our day-to-day lives, however, having knowledge about our expenditures, upcoming weather conditions, or the extent of our children’s screen time is important. This empowers us to refine our budgets, organize future family or team events, make informed decisions, prevent potential issues, and more.

In warehouses and distribution centres, understanding the performance of operations, systems, and overall business is important. This knowledge enables the leadership team to pinpoint underperforming processes or areas of the business bleeding finances. Armed with this information, they can proactively take corrective measures, plan strategically, make informed decisions, set priorities, and more.

For instance, consider a scenario where the data shows that a particular process is consistently inefficient for several weeks, months, or even, years. With knowledge of this bottleneck, the site team can implement targeted improvements, potentially streamlining the entire operation. Likewise, if data indicates certain products are consistently slow movers, the site team can adjust its inventory strategy, increasing productivity and maximizing profitability.

In essence, knowledge equips individuals and organizations with the tools to address challenges, optimize performance, and make informed choices for a more successful and sustainable future. Now that we understand the significance of having the knowledge, the next question is, how do we set this up?

  1. Define business objectives:

    • Understanding what is important for the company, this could include improving customer satisfaction, reducing operation cost, or increasing the speed of order completion.
  2. Identify key processes:

    • List down the processes that are critical to achieving the business objectives, such as receiving, put away, picking, packing, staging, and dispatch.
  3. Determine KPIs and set targets:

    • Select measurable KPIs and set targets that aligns with the business goals and critical processes. Common warehouse KPIs includes:
      • Accuracy of receiving, inventory, and picking.
      • Throughput and efficiency of critical processes
      • Order Leadtime
      • On Time Delivery
      • Cost per carton
  4. Track and monitor KPIs

    • Implement a robust tracking system to monitor KPIs regularly. This could involve using warehouse management systems (WMS) or other technology solutions to capture real-time data and generate insightful reports and dashboards that the team can use in a regular basis.
  • Additionally, for automated warehouses, common KPIs include:

    • System availability and reliability
      • Mean time between failure (MTBF)
      • Mean time between assist (MTBA)
      • Mean time to recover (MTTR)
      • Pallet utilization

In conclusion, the well-known saying “knowledge is power” holds true in both our personal lives and professional endeavours. From managing daily expenses to optimising warehouse operations, having the right information empowers us to make informed decisions and drive positive outcomes. By defining business objectives, identifying key processes, determining KPIs, and implementing robust tracking systems, we pave the way for continuous improvement, enhanced operational efficiency and overall success. Let’s commit to using data driven insights and knowledge to understand our warehouse operations.

Ready to optimise your warehouse operations? Explore how harnessing knowledge can drive efficiency and profitability with Argon & Co. Visit our Warehouse Operations services page to learn more and start your transformation journey today.

Annah Avellano

Senior Consultant, Australia

[email protected]

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