Many managers look only at the negatives when talking about warehouse productivity. But, most people want to be in 
alignment with your productivity goals and to contribute in meaningful ways to the success of your business.
As distribution consultants, we conduct warehouse assessments, or warehouse evaluations, with companies focusing on benchmarking and productivity. We find many companies do not openly share their warehouse KPIs and results with employees. Many don’t even have a formal, weekly process for capturing and reporting the KPIs. Those that do a good job of the weekly reporting often don’t have department and individual employee productivity goals and don’t publicly publish the results. You can’t improve something you haven’t measured.
For most multichannel operations, receiving more boxes per hour, shipping more packages per hour, increasing on-time shipment, reducing error rates – this will result only when people achieve it. Yes, we should smartly invest in material handling equipment, sortation etc., but for most companies, future productivity comes from our people making it happen.
Using operational assessments as an employee motivator
I can’t believe how many owners and managers don’t want the employees to see the results of an operational assessment. We don’t need to show everything, but we don’t have anything to hide. By conducting an operational assessment, you can identify what the key drivers are that you want to improve. Reporting these results to employees re-enforces the factors we want to improve.
Below are 7 steps for using an operational assessment to set, report, and improve your operational goals:
1. Report Daily results
On the low investment end, hang a white board in a high traffic area reporting yesterday’s production results. Example, in the DC, report packages shipped yesterday, types of errors/ inventory adjustments, receipts processed, etc.
One client used some technology installing monitors which counted down the workload on-line. At the beginning of the day, the system showed the orders to be processed and as orders were shipped, the monitors showed what was left. You knew exactly the packages for the day and hour as an employee. Are you re-enforcing the outcomes you desire?
READ MORE: Improve Warehouse Productivity by Measuring and Posting Numbers
2. Report KPIs weekly
Clearly, reporting KPIs has gone nuts in many companies. One client challenged us to recommend “the 5 most important” in his distribution center. Excellent way to approach it! We got it to 9 –covering qualitative and quantitative.
3. Set and post goals by department
Move beyond just reporting results to setting goals and report against what’s achieved. Year over year (YoY) improvement is the most important aspect of measurement you can provide.
4. Set goals for the individual employees and post their productivity
Conduct an operational assessment and identify the most important areas that need managing and that are costing you the most money and headaches - then measure them for improvement. Celebrate your employees productivity in those and other areas! In every company there are super stars in some form of production task. The picker that out picks her fellow employees by 30%; the packer that achieves day in and out 10 boxes per hour more than anyone else. Post the entire department’s productivity by person.
5. Coach employees
How can you help each person be more productive and deliver better customer service?
6. Raise the bar and reward their success too
I believe that we can acknowledge personal contribution in ways that aren’t always money-oriented. Recognition and letting everyone know how they contributed is key.
7. Manager training
All this leads to one of the most important and often under discussed topics. How can we educate and give department leads and supervisors more training that makes them a better supervisor? Are there community college courses? Do you have an internal training plan for your key leads and supervisors? Your success is truly in their hands.
Summary
We can't stress how important it is to conduct an operational assessment using your whole team. The goal is to:
- identify the areas to be measured, including your problematic areas
- develop the most important "top 5" KPIs to manage in the identified areas
- continually report them to your employees.
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