How to Measure Warehouse Performance

Warehouse Performance, Cost, and Value Measures

16

4.2 Warehouse Productivity Performance The most popular and traditional warehouse performance measure is productivity. The formal definition of productivity is the ratio of the output of an entity to to the resources consumed achieving that output. We recommend that our clients monitor the productivity and utilization of the key resources in the warehouse – labor, space, material handling systems, and warehouse management systems. We typically measure overall labor productivity as the ratio of units, orders, lines, and/or weight shipped out of the warehouse to the number of man-hours spent in operating, supervising, and managing the warehouse. We typically measure overall space productivity as storage density, the ratio of the amount of inventory storage capacity to the square footage in the warehouse. It is normally expressed as the value, cube, pieces, or positions of inventory that can be accommodated per square foot.

Figure 18. RightChain™ Warehousing Scoreboard Facility Productivity Screen

World Class Warehousing™