Use Operational Assessment to Set, Report & Improve Productivity Goals


Talking about warehouse productivity, many people look on its “dark side”. Most people want to be in Operational Assessment for Productivity Goalsalignment with your productivity goals as a manager and to contribute in meaningful ways to the success of your business.

As I conduct an operational assessment with companies focusing on benchmarking and productivity, I 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.

DOWNLOAD: Key Principles to Assessing Your Warehouse Operations

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. Sounds obvious – take a minute and rate how well you do these things:

  • What’s the outcome you want? I can’t believe how many owners and managers don’t want the employees to see the results. We don’t need to show everything but we don’t have anything to hide. We haven’t taken the time to explain how business works and after we pay all stakeholders, how small a percent profit is left. And we need to reinvest in the business. By conducting an operational assessment, have you identified what the key drivers are that you want to improve? Without reporting the results to employees, are we re-enforcing the factors we want to improve?

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?

  •  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.
  • 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.
  • 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. 
  • Coach them. How can you help each person be more productive and deliver better customer service?
  • 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.
READ: 38 Fulfillment Cost Reduction and Productivity Improvement Ideas
  • 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.

We can't stress it enough, conduct an operational assessment using your whole team to identify those areas to be measured, be sure to include your problematic areas, develop the most important, "top 5" KPIs to manage those areas, and continually report them to your employees.