WERC DC Measures Study Finds Shift to Customer-Focused Metrics

On-time shipments remains the most popular metric among members of the Warehousing Education and Research Council (WERC)

Orlando, Fla.May 5, 2015—On-time shipments remains the most popular metric among members of the Warehousing Education and Research Council (WERC), followed by internal order cycle time in hours. These were some of the finding of the annual DC Measures Study presented during the WERC Conference Program at the Hyatt Regency Orlando this week. The 38th annual conference continues through Wednesday.

The survey indicates a preference shift from operations-based measures to customer-based measures.

The survey was presented during the WERC conference by researchers Joe Tillman, founder of TSquared Logistics, Karl Manrodt, professor at Georgia College & State University, and Donnie Williams, assistant professor at Georgia Southern University.

Every year, the survey identifies 12 of the most popular measures based on the number of results for each metric. The purpose of the study, which began in 2003, is to eradicate bad warehousing practices. Survey participants report actual levels of performance for the past year.

The presenters explained how strategy affects the metrics an organization tracks and how that affects the significance of the metrics to the DC. If a business’ strategy focuses on cost containment, the metrics will vary when compared to an organization that is focusing on customer service. The presenters emphasized that although every organization would like to be the best of everything, it is unrealistic and overly expensive to do that.

The speakers did not suggest any particular metrics as the most critical overall, as they stressed that this varies based on an organization’s strategy.

The study captures 45 key operational metrics and groups them into five sets: customer, operational, financial, capacity/quality and employee/safety. There are additional sets related to perfect order and cash-to-cash cycle measurement.

The survey found that participants still favor the metrics they used since the study began. The top measures are, in order of preference:

  • On-time shipments (customer).
  • Internal order cycle time in hours (customer).
  • Dock-to-stock cycle time in hours (inbound operations).
  • Total order cycle time in hours (customer).
  • Order picking accuracy, percent by order (quality).
  • Average warehouse capacity (capacity).
  • Peak warehouse capacity used (capacity).
  • Back orders as a percent of total orders (customer).
  • Back orders as a percent of total lines (customer).
  • Percent of supplier orders received damage free (inbound operations).
  • Lines picked and shipped per person hour (outbound operations).
  • Lines received and put away per hour (inbound operations).

A newcomer joined the list this year: back orders as a percent of total lines.

This year’s most frequently employed metrics were on-time shipments, internal order cycle time and dock-to-stock cycle time, suggesting that customer service and velocity are top concerns.

This year, four of the top 12 are operations measures, suggesting the focus on operations is less intense than in recent years.

The best-in-class performers were able to improve or maintain their prior year’s performance on nine of the operations-based measures.

For more information, visit werc.org.