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KPIs in logistics warehouses: How customized real-time management helps firms deliver on their customer promise

By Guillaume Dorée,Reflex Solution Consultant, Hardis Group

Indicators and dashboards are a way to manage warehouse operations, helping to monitor the progress of operations, continuously improve quality, boost productivity, and gain a detailed understanding of activity more generally. While historical quantitative indicators still have their uses, firms now need customized, shared, real-time dashboards to support ongoing corrective decision-making—and to help them deliver on their customer promise.

From quantitative reporting to real-time management

Historical indicators provide a quantitative snapshot of activity—number of lines, weight, or volume processed—over the course of a day, week, or month, giving managers a better understanding of what’s happening in a warehouse. They offer an overview of activity and quality, which makes them useful for improving operational performance.

Yet managing a warehouse is about the day to day—and the here and now. What managers really need is to be able to monitor logistics operations (receipt, preparation, and despatch) as they progress. Because when they know teams are ahead of or behind schedule, they’re able to plan several hours forward, refocus priorities, dynamically assign resources to the right place, and generally make the warehouse more efficient through granular adjustments to resource usage rates. Likewise, having real-time information lets managers pinpoint operational anomalies (storage errors, saturated picking locations, or prepared handling devices that haven’t moved for some time) and fix issues on the fly.

By the same token, productivity indicators—such as benchmarking performance or efficiency against past or market standards—are a vital tool in assessing resource utilization (for logistics service providers) or identifying pockets of over- or under-productivity within individual processes (receipt, preparation, and despatch). Having this macro-scale vision allows managers to spot deviations from the norm for each logistics flow—and take corrective action. These types of indicator also help to identify where team members require additional training, or where processes need to be revised.

Adapting indicators to user requirements

Adapting indicators to user requirements may seem like an obvious step, but it’s not something that’s done systematically. Yet team, platform, and site managers are the people who know their processes best—the very people who can say for certain which KPIs will prove most useful for managing logistics and warehouse operations.

This bottom-up approach also means that every site will need its own indicators, tailored to its specific features and characteristics (size, processes, volumes, and more). In other words, no two logistics platforms are the same, and each one will need a custom-built dashboard to manage its operations.

Getting creative

It follows naturally from the previous point that the way indicators are presented and formatted in dashboards also needs to be customized to the user’s preferences. That’s because indicators can be presented in so many different ways: a figure, a chart, a progress bar, and much more besides. Every person works and consumes information differently, so allowing individuals to build their own dashboards—in a format that suits them—is only going to make things more efficient.

Managing actively

Having relevant information, in real time, and taking immediate corrective action is precisely what management is all about. And when managers can adjust things directly from a dashboard—such as moving a resource to a different team—it makes the process even simpler and more effective: the user doesn’t have to come out of the dashboard environment and go back to the warehouse management software interface to make changes. This is what’s known as active warehouse management.

Sharing indicators and dashboards

Pulling indicators together and compiling dashboards requires a great deal of organization and structure, since it involves deciding on the most relevant data and information for the units that a firm needs to manage (such as time, team, zone, or dock).

Since most dashboards are designed to be shared between multiple users, making sure they’re useful to everyone requires some advance planning. What’s more, they need to be accessible from various different devices, including PCs, smartphones, and large dockside screens. This preparatory work is yet another way to get the whole workforce involved in real time.