or the percentage of orders sent damage-free. You name
the measure, and if it’s important to the industry, we
have the metric.
More recently, however, we have been turning our
attention to metrics of another sort—what we might call
the “soft” side of logistics. But more on that later. First,
we’ll take a look at what we learned this year.
WHICH METRICS MATTER MOST?
This year’s study was conducted among DC
VELOCITY’S readers and members of the
Warehousing Education and Research
Council (WERC) by researchers from
Georgia Southern University and the consulting firm Supply Chain Visions. While
the number of responses to the survey,
which was carried out via an online questionnaire in January, was relatively large (in
excess of 225 for 2012), it did not match last
year’s usable responses. In order to increase
the predictive power of the benchmarks,
researchers combined the 2012 results with
2011’s, for a total of 802 participants.
Respondents were asked to identify the
metrics they used in their operations as
well as to grade their own facilities’ performance against 44 specific operational
measures. For purposes of analysis, the
measures have been grouped into five balanced sets: customer, operational, financial, capacity/quality, and employee.
As for what performance metrics are
most favored by DC and warehouse professionals, the
study has shown that the top measures don’t vary much
from year to year. For 2012, the most frequently
employed metrics were on-time shipments, order picking accuracy, and average warehouse capacity used.
Those same three measures also topped the previous
year’s list, albeit in a slightly different order.
In fact, as Exhibit 1 shows, there has been little change
in the top 12 metrics used by the industry in the past
three years—for example, the only change in this year’s
rankings from 2011 was a slight variation in the order of
the top 12. (We should point out that we made a change
in methodology last year in calculating the top 12 list,
which caused some shifts in the rankings against previ-
ous years.)
EXHIBIT 1
The Top 12: The most commonly
used DC metrics
Metric (by rank in 2012 survey) and category
1. On-time shipments (Customer)
2. Order picking accuracy (Capacity/Quality)
3. Average warehouse capacity used (Capacity/Quality)
4. Dock-to-stock cycle time, in hours (Operational)
5. Internal order cycle time (Customer)
6. Total order cycle time (Customer)
7. Peak warehouse capacity used (Capacity/Quality)
8. Lines picked and shipped per hour (Operational)
9. Annual workforce turnover (Employee)
10. Fill rate — line (Operational)
11. Lines received and put away per hour (Operational)
12. of supplier orders received damage-free (Operational)
Did not appear in top 12
2011 Rank 2010 Rank
11
32
24
56
6 10
7*
49
8 11
12 8
11 3
9*
10
the metrics, we note that after several years of steady
improvement, performance in general seems to have leveled off somewhat. Given the profile of the respondents—members of a professional organization and/or
readers of a leading logistics industry publication—you
might expect to see a continuation of the long-term
trend of performance improvement. However, logic dictates that we will eventually reach a point of saturation,
and we believe we are nearing this point.
In addition, we have noticed a continued tightening of
the measures. In other words, the gap between best-in-class companies (the top-performing organizations) and
“major opportunity” companies (the bottom perform-
