How to improve warehouse productivity?

Do you measure your warehouse productivity? We find that companies often don't know how good or bad the performance of their operations really is and don't measure individual employee productivity or warehouse productivity in general. Before we explain how to measure your productivity, first we would like to stress why every company should do it.

The advantages of measuring warehouse productivity are huge. We have implemented the mesuring of warehouse productivity with almost all of our clients (it can be done within days!) and the changes were dramatic. Not only is the warehouse manager able to use the information to identify bottlenecks, it changes the mindset of the warehouse workers immediately.

People are much more aware of their actions and how they can improve their own performance. It works on both the good workers, who can finally show what they're worth and the bad ones, who are now forced to either comply with new targets or face the consequences. It also creates a healthy competition which adds to the increase in productivity. The implementation of a system that measures warehouse productivity can lead to savings of 25% or even higher on personnel costs.

Productivity can be measured for any process or person. So how is warehouse productivity measured?

First of all one should look at the characteristics of their "warehouse production". The production can be measured in pallets, boxes or pick lines but also in individual items (e.g. books, sandwiches, lamps, etc.). Then it needs to be determined at what level you want to measure productivity: top level, process level or individual level. The productivity is measured as Production divided by Hours, and expressed in a production per person per hour. For example: A person receives 100 pallets in an 8-hour day. His/her individual productivity is 12.5 pallets per hour.

Once data is being collected it is easy to identify bottle necks, eliminate those and measure the effects in your warehouse performance (productivity). This is an ongoing effort leading to a more efficient and cost effective operation.

Every company requires a different way of measuring productivity depending on process, goods, level of automation, etc. In our opinion it is one of the most important tools a company should implement because it can truly cut costs significantly and make the operation perform better. In addition, it does not have to cost anything to start measuring your warehouse productivity.

If you need assistance setting up a system to measure your warehouse productivity, feel free to contact us.