The Best Practices in Measuring Warehouse KPIs for Enhancing Productivity

warehouse-kpis-measure

This best practice is about measuring and improving warehouse productivity through LMS, which stands for labor management system. There are typically two segments of customers that will benefit significantly from an LMS, one is this huge ERP – vendor who supplies WMS. For example we will take SAP.  

  1. SAP’s core was ERP and they still developed and integrated the WMS because many of their customers have integration challenges with other platforms. They gave them the WMS and because their core is ERP there is no solid LMS that works. They should be buying some other LMS and integrate into the SAP’s – WMS which is a cumbersome process. 
  2. The second thing is that there are small companies with just a hundred thousand square feet or two hundred or three thousand square feet with anywhere of revenue from 10 million to let’s say hundred million, two hundred million.

They don’t have sophisticated LMS and for that reason they are not able to measure their employees work. There are also no metrics in place and also in a general sense the argument to implement an LMS was like “you cannot manage what you cannot measure” if you want to manage obviously you have to measure and you need an LMS. 

You can measure the performance of operators, supervisors and managers along with their KPIs such as picks per hour, units per hour metric, and EPP (Employee Performance Percentage) and then post it on a notice board on a daily basis. The fact that the personnel is measured and their KPI’s getting posted on the board gives you a productivity boost of 7%. Personnels will now do the job perfectly for the fact that you’re measuring and posting their KPIs. 

This alone gives 7% increase in productivity and if you start doing it even efficiently and optimally, you can gain more throughput. That’s the value prop for LMS, but it was expensive before but now it’s not the case, I mean there are many LMS available that even small enterprises can have. If they want to integrate in their existing WMS systems – it’s not a super complex process. 

It can be done quickly almost like a plug and play technology. So that’s something to think about and if you’re managing a big labor pool with multiple shifts and see a big opportunity from a labor perspective and start optimizing certain things such as these labor metrics, that will definitely help in pushing the productivity levels to the maximum levels. Please share your thoughts in the comments section. 

Originally published at Smartgladiator.com on July 16, 2019.


Puga Sankara is the co-founder of Smart Gladiator LLC. Smart Gladiator designs, builds, and delivers market-leading mobile technology for retailers, distributors, and 3PL service providers. So far, Smart Gladiator Wearables have been used to ship, receive, and scan more than 50 million boxes. Users love them for the lightweight, easy-to-use soft overlay keyboard and video chatting ability, data collection ability etc. Puga is a supply chain technology professional with more than 17 years of experience in deploying capabilities in the logistics and supply chain domain. His prior roles involved managing complicated mission-critical programs driving revenue numbers, rolling out a multitude of capabilities involving more than a dozen systems, and managing a team of 30 to 50 personnel across multiple disciplines and departments in large corporations such as Hewlett Packard. He has deployed WMS for more than 30 distribution centers in his role as a senior manager with Manhattan Associates. He has also performed process analysis walk-throughs for more than 50 distribution centers for WMS process design and performance analysis review, optimizing processes for better productivity and visibility through the supply chain. Size of these DCs varied from 150,000 to 1.2 million SQFT. Puga Sankara has an MBA from Georgia Tech. He can be reached at [email protected]com or visit the company at www.smartgladiator.com. Also follow him at www.pugasankara.com.

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