I’ve completed a survey on what factors are most important when it comes to improving warehouse performance.  Are people, process or technology drivers most important?

An executive overview will be published in DC Velocity in May.  I will speak on what 3PLs report being most important for them to improve warehouse performance at eft’s 3PL Summit in June.  And ARC will send out the full Strategic Report in the same time period.

I’m beginning to analyze the data, and as questions arise I reach out and try to get answers to what I am seeing in the data.   21 percent of our valid respondents reported that it was software technology in the form of warehouse management (WMS), labor management (LMS), or Voice systems that most improved their warehouse’s performance over the past five years.

And those that implemented warehouse software also reported a variety of other benefits in addition to the core benefit I was analyzing – improvement in costs per unit shipped.  Many of these benefits are not surprising.  Strong majorities reported that performance on the perfect order metric, order cycle time, average warehouse capacity used.

Far more respondents also reported that their annual workforce turnover rate and the OSHA incident rate got better, rather than worse, as a result of warehouse software.

It was no surprise to me that performance on the perfect order metric would improve.  The RF scans or Voice instructions make picking errors far, far less common.

It was also easy for me to see why order cycle time improves.  The payback on WMS, LMS and Voice mainly comes from improved productivity.

Average warehouse capacity would improve because a WMS gives better visibility as to which slots are full, and how full they are.  Further, with WMS, items are much less likely to be stored where they are supposed to be, so when workers go to pick something it is actually there.  This means a warehouse does not have to store as much just in case inventory.

But it was not clear to me why warehouse software could improve either the workforce turnover or the OSHA incident rate.  I emailed a few folks whose opinion on these matters I greatly respect.

I thought Tom Kozenski, VP of Industry Strategy at JDA, had the best answer.

“This is easy.  Turnover goes down because:

• Workers like to be recognized and Labor provides a fair and equal method for calculating labor performance. The classic comment from a good worker is ‘See, I told you I was your best picker, and now I can prove it because I consistently exceed the labor standards.’

• Workers like the system-directed concepts of a WMS. The WMS tells them where to go, what to do, what to do next… Life is good. The WMS leads them thru their workday.

Accidents decrease because:

• Safety and Accuracy are inherent to every Standard we create for every task using our JDA Preferred Methods. Each task is measured based on how to do the task safely. For example, if there is a forklift operator that is running at an average of over 130% of standard, you know you have a safety or accuracy problem. That operator is cutting corners, missing steps in the process, and/or driving dangerously.
• Slotting can be used to properly profile items to a location. This can protect you from placing heavy items in locations that are too high or too low (causing back problems or dropping of goods).
  • The WMS will properly build pallets and cartonize items into a tote or carton. This will protect against unstable pallet-loads and/or cartons that are too heavy.
  • System-directed work will ensure that the person with the right training and the right material handling equipment will be sent to do each task. Example – The WMS won’t send a pallet-jack operator to pick an item from the third level of racking.”

Thank you Tom!

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