Take on-time shipments, for example. Exhibit 2
shows the performance for companies categorized as
In terms of performance, we believe
the metric to watch over the next couple
of years will be annual workforce
turnover. As Exhibit 3 shows, the
turnover rates among best-in-class and median per-
formers are at or near their lowest points since 2007,
when we first began to break out the data by quintiles.
As economic activity heats up, we expect to see these
numbers return to 2007 levels, when the median
turnover rate was 14 percent.
Why? In 2006, the national unemployment rate hov-
ered around 4. 5 percent, with jobs added at the rate of
about 200,000 a month. (Keep in mind that the 2007
survey report was based on data from 2006.) The low
unemployment rate meant greater opportunities for
workers in search of better pay or working
conditions.
WHAT’S NEXT?
As we’ve noted, the gap between the best- and weakest-performing DCs has narrowed or stayed the same in
recent years. That raises the question of what will emerge
as the next competitive differentiator. We would argue
that as facilities continue to close the gap in operational
EXHIBIT 2
On a plateau: Performance against key metrics 2008–2012
Performance for 2012
On-time shipments
Order picking accuracy
Fill rate - line
Major opportunity
< 95.7%
< 98.3%
< 95.0%
Typical
>= 98.0 and < 99.1%
>= 99.1 and < 99.7%
>= 98.0 and < 99.0%
Best in class
>= 99.8%
>= 99.9%
>= 99.8%
Median
98.5%
99.5%
98.5%
Performance for 2010
On-time shipments
Order picking accuracy
Fill rate - line
Major opportunity
< 95.0%
< 98.0%
< 94.8%
Typical
>= 98.0 and < 99.0%
>= 99.1 and < 99.7%
>= 97.9 and < 98.8%
Best in class
>= 99.8%
>= 99.9%
>= 99.8%
Median
98.5%
99.5%
98.0%
Performance for 2008
On-time shipments
Order picking accuracy
Fill rate - line
Major opportunity
< 94.0%
< 98.0%
< 94.3%
Typical
>= 97.8% and < 99.0%
>= 97.5% and < 98.6%
>= 99.0% and < 99.5%
Best in class
>= 99.8%
>= 99.9%
>= 99.7%
Median
98.1%
99.3%
98.0%
Note: Survey responses have been divided into quintiles to make it easier for companies to see where they stand in comparison with other warehouses and DCs. For example, the “best in class” category represents the
top 20 percent of respondents, while “major opportunity” represents the lowest 20 percent of respondents, or those who have the most to gain from performance improvements.
