Bright Idea

Jul 01, 2002 9:30 PM  By

Using a concept called data envelopment analysis (DEA), a Georgia Institute of Technology research team has developed an Internet-based tool for benchmarking warehouse performance. The tool allows individual warehouses to conduct self-assessments online. Users must register and log in, then enter their data, a process that should take less than an hour. The program, iDEAs-W (Internet-based DEA for warehousing) computes a comparative benchmark score based on data from over 150 other warehouses and responds within minutes.

Current data offer several intriguing insights. For instance, the statistics suggest that large equipment investment does not correlate with lower labor costs; in fact, the opposite is true. They also show that only about 10% of warehouses are efficient — over two-thirds have efficiency scores below 50%. Warehouses with high investment costs tend to be less efficient if they are large, and warehouses that do mostly full-case picking demonstrate, in the diplomatic language of the report, the largest opportunity for improvement.

The iDEAs self-assessment tool, which is free, is available at www.isye.gatech.edu/ideas. For more information, contact Leon McGinnis at (404) 894-2312 or by e-mail at Leon.mcginnis@isye.gatech.edu.