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Why you should care about Performance Insights within your Warehouse or Logistics Organisation?

Updated: Dec 7, 2018


Assumption

1. You are a manager or executive within your Warehouse or Logistics Organisation

2. You want to Improve and manage overall performance

3. You understand that what you can’t see or measure, you can’t manage effectively

4. You want some form of Evidence Based Leadership / Management Approach

5. You may have decent operational reports, but you don't have an umbrella view of performance and no Interactive Performance Measurement visibility that identifies the Opportunity/Issue areas clearly.

6. You struggle to interact with insights to explain the “why”

7. You may have a Warehouse Management System or Transport Management System. These can be great to manage day to day Operations but perhaps not overall Performance Insights


A properly designed Business Intelligence solution may help you greatly.


What is Possible and What you Need to manage

Both you and your Customers can benefit by seeing the right insights.


Your Staff, Assets, Customers, Products and Services all impact your Performance greatly. Wouldn’t it be great to know exactly how all are performing and their impact on overall Performance of the business? I will outline below, what I consider is crucial to see. Without which you could be flying blind:


1. What should you care about Measuring:


WHAT MEASURES YOU SHOULD KNOW

(a) Value (e.g. Ops Cost v’s Revenue)

(b) Revenue, Ops Cost

(c) Productivity/Efficiency Measures (e.g. Picks per hour, Pallets, Weight or KM’s)

(d) Utilisation Measures (Utilisation of Truck, Warehouses, Staff)

(e) Inventory Measures like Estimated Days of Stock (Using Stock On Hand and Transactions History)

IDENTIFYING THE DIMENSIONS – i.e. What to Measure By

(a) Customer

(b) Service Type

(c) Product

(d) Locations / Department

(e) People or Teams

(f) Equipment – Truck or Warehouse

(g) Date (Trend)


It is all about identifying what is performing well and what is not performing well.


2. How much should you care about what is Performing well or not. Some things you should care enormously about and others not. It depends on the impact.

You must expect the 80/20 rules to be exposed for you.


It is hugely important that you focus on what has greatest impact.


As an example, you may expose 20% of Customers contribute to more than 80% of Cost. You may then find that 80% of these costs are a result of only 20% of the activity types. You may find the cost of these activity types is effected massively by a Variable (which is now measured). You may or may not have Control on some variables/measures. i.e. A Customer may affect some measures. This may trigger Customer contract discussions or changes to pricing models to bring back control to the business.

These findings should be exposed quickly and interactively i.e. as you get an insight measure, you have a natural question, which in turn allows you to drill through and answer.


You must identify where your focus should be – i.e. focus on the 20% with greatest performance impact.


3. Evidence to challenge/confirm Perception – I was once informed that a new WMS system resulted in slower process times and the business needed more people. We had evidence to prove that in fact Efficiency was not the problem but Utilisation of Staff was the issue. It ended up being a bottle neck step which resulted in Staff waiting for work instructions. It was fixed without more people and the perception on new system efficiency was corrected.


Summary:

The benefits of Performance Measuring through Business Intelligence are potentially huge.

What Truck Runs are profitable can be exposed?

What Customers are valuable or Costing you are exposed and why?

Which Staff, Teams or Equipment/Assets are not being utilised and resulting in wasted cost or missed revenue?

What Analytics Insights can we share with Customer so they get the most out of our service? E.g. what to share so they can manage their inventory better and save money – this will naturally make our Customers love us more and see our overall service offering as more than just a cost of core service.


The benefits of appropriate Business Intelligence, Performance Measuring and Visualise Insight solutions are potentially enormous for businesses.


Feel free to reach out or share your experiences and challenges with me on stuart@4gm.com.au

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