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The Key Processes of Warehouse Efficiency

Since 2003, the Warehouse Education and Research Council (WERC) has surveyed hundreds of logistics professionals each year to determine the key metrics for measuring the efficiency and performance of distribution centers (DCs). This year's DC Metrics report identified four critical measurements of warehouse efficiency: on-time shipments, order picking accuracy, dock to stock cycle time, and internal order cycle time. How does your distribution center perform in these key areas?

What Do the Metrics Mean?


The on-time shipments metric measures the percentage of orders that leave the warehouse at the time planned. This time is defined by the customer or the shipper. With so many fashion retailers promising next-day or even same-day delivery, apparel brands must pay close attention to this metric. If it is too low, unsatisfied customers may start to buy from another vendor better able to meet their demands. No matter which industry they serve, third-party logistics providers should strive for consistent on-time shipments.

Orders must be both timely and accurate. Order picking accuracy measures the percentage of orders fulfilled as requested by customers. To meet this metric, it's just as important for a warehouse worker to select the right dress as it is for them to select the size the customer requested.

Timeliness is also key for the two remaining metrics: dock to stock cycle time and internal order cycle time. Dock to stock cycle time refers to the period from when the dock door receives a product until it is available for order selection. Internal order cycle time is the period from when a customer places an order to when it's shipped. Third-party logistics providers should attempt to reduce both of these times.

Why Should Distribution Centers Collect Data?

Management consultant Peter Drucker once said "If you can't measure it, you can't manage it." By extension, if you don't measure it, you're simply not managing it.

Collecting data highlights areas where distribution centers are performing well and those where they should improve. The WERC report noted median scores for the key metrics, as well as ratings for percentiles. This helps distribution centers determine whether they have a major opportunity for improvement, whether they are best in class, or whether they are performing somewhere in between. Collecting data therefore allows companies to compare their performance in key areas with others in the apparel sector.

How Does Your Distribution Center Measure Up?

As an apparel company, you're well within your rights to ask your distribution center for their performance results. Comparing these to the 2016 Distribution Center Metrics can help you assess their efficiency. If you want to feel confident about the performance of your apparel distribution center, contact the professionals at The Apparel Logistics Group. We outperform other third-party logistics companies in the areas outlined by the WERC study yet always strive to improve our performance.

Third-party logistics organizations owe it to their customers to provide the most efficient service they can. By collecting data, comparing it to established metrics for success, and striving to improve their results, a motivated third-party logistics organization can help your apparel company achieve success in customer satisfaction and profit margins.

Posted: 8/31/2016 10:21:49 AM by Global Administrator | with 0 comments


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