Sometimes things don’t change. For the past three years the Warehousing Education and Research Council (WERC), has found that respondents of their annual benchmarking report their top business and operational strategy remains customer service (40.9%).
This surpasses a mixed strategy of being all things to all people (37.3%), a cost leadership strategy (16.0%), or a product/market innovation strategy (6.2%).
The 2019 DC Measures study included Individual responses from 489 participants, with the largest group of respondents reporting their title as “manager” (47.8%); 33% of respondents indicate they report directly to the C-Suite,
The top three facility types represented by survey participants are regional (30%), centralized (19%) and wholesale (19%). Their companies report annual sales less than $100 million (30.8%), between $100 million and $1 billion (40.8%), and greater than $1 billion (28.4%). With regard to what’s being picked, the majority of facilities (64.4%) pick full cases as opposed to pallets, and 51% say their customers are either end consumers or retailers.
The most popular benchmarking metrics used have shifted over the previous year’s report. In 2018, five of the top 12 metrics focused on employees; the 2019 DC Measures study notes that only two employee-focused metrics remain in the top 12.
Instead, operations are prioritizing quality and capacity, with the top five metrics being:
- Order Picking Accuracy (percent by order)
- Average Warehouse Capacity Used
- Peak Warehouse Capacity Used
- On-time Shipments
- Inventory Count Accuracy by Location
As with the previous iterations of the report, the gathered benchmarking data is reported using a “quintile” format, which evaluates the data on a five-point maturity scale. This structuring methodology reflects where respondents are situated with respect toward having achieved a “best practice” within a given metric. To be considered “best-in-class,” performance levels must fall within the top 20% of all respondents.
As with the previous iterations of the report, the gathered benchmarking data is reported using a “quintile” format, which evaluates the data on a five-point maturity scale. This structuring methodology reflects where respondents are situated with respect toward having achieved a “best practice” within a given metric. To be considered “best-in-class,” performance levels must fall within the top 20% of all respondents.
“When we looked at how respondents’ operational performance declined, improved or remained the same year-over-year in conducting this study, what jumps out is how difficult it is to maintain consistent performance over time,” says lead WERC researcher Joe Tillman, Founder of TSquared Logistics. “Performance management truly thrives on consistency—proven in the finding that the best-in-class operations did the best in maintaining their performance levels in 11 of the 36 total measures, and improved in eight. In most cases for best-in-class operations, the only way to achieve higher performance is to commit to significant investment and risk.”
As for the rest, the median performers improved in 13 of the 36 measures, declining in 14. Operations with major opportunities to improve performance made significant gains in the 2019 findings over the previous year, with improvements in 12, maintained in 10 and declined in 14 measures. “The median and major opportunity groups made significant strides,” Tillman adds, noting that the full report takes a closer look at these findings, as well as explores the significant shift in top 12 metrics away from an employee focus.
