It’s perfectly OK to be average — unless, it seems, you’re looking for a job in a warehouse. Preliminary results of a study conducted by Miami University and the Warehousing Education and Research Council (WERC) show that 76% of 50 private warehouses surveyed have trouble finding high-quality employees, and consider this factor their top operational challenge. Retaining effective workers comes in a close second, with 59% citing this as a major problem.
People-related concerns rank higher on the list of challenges than such traditional indicators of performance as meeting goals for order accuracy (41%) and on-time delivery (33%). Forty-six percent of respondents report difficulty with managing hourly labor and recruiting skilled management — which might well explain why a significant number of warehouses find it tough to manage inventory effectively (54%) and run an efficient operation (52%). Technology, touted as the savior of many a business, ranks fairly low on respondents’ roster of concerns: Only 22% say that having state-of-the-art IT is important.
On the upside, respondents report a strong emphasis on monitoring warehouse performance, with 93% tracking and reporting costs. However, the level of detail at which they do this varies. Sixty percent include corporate and logistics overhead costs in their assessment. Sixty-five percent measure warehouse cost as a percentage of sales, but fewer than half (41%) track cost per order and handling charges per case. Those who keep tabs on total annual warehouse cost are even fewer, amounting to 39% of survey respondents. Just one-fifth of private warehouses allocate warehouse cost to products and track storage cost per case.
Using space creatively is a key measure of warehouse efficiency, but 20% of respondents do not use all available storage space. The average facility assigns 49% of its space to storage; 16% to aisles; 15% to picking areas, 12% to staging areas; 3% each to cross-docking and reworking; and 2% to other uses.
For more information, contact WERC at 1100 Jorie Boulevard, Suite 170, Oak Brook, IL 60523; phone: (630) 990-0001; e-mail: [email protected].
Puttin’ On the Ritz
| Order accuracy | 96.9% of orders | |
|---|---|---|
| Damage | ||
| Orders damaged | 3.1% | |
| Inventory damaged | 1.0% | |
| Timeliness | ||
| Orders shipped on time | 95.8% | |
| Warehouse order cycle time | 4.0 days | |
| Annual inventory turns | 10.1 turns | |
| Warehouse G&A to wholesale cost | 28.6% | |
| Available storage space used | 80.0% | |
| Source: WERC | ||
A Day in the Life
| WAREHOUSE ACTIVITY | % OF TOTAL HOURS |
|---|---|
| Putaway/picking orders | 47% |
| Packing and palletizing | 10% |
| Loading vehicles | 10% |
| Unloading vehicles | 8% |
| Replenishing pick slots | 7% |
| Labeling | 5% |
| Returns processing | 4% |
| Quality inspection | 3% |
| Repair damage/repack | 2% |
| Kit assembly | 1% |
| Product assembly | 1% |
| Other activities | 2% |
| Source: WERC | |