May 11, 2017
Column | big picture

The times they are a-changin'

The latest annual DCV/WERC DC metrics study reflects the impact of a rapidly changing retail environment on DC operations and shows how people are valued above all in distribution.

By David Maloney

You can't make improvements if you don't know where you are. That's the reason for metrics. Distribution centers measure performance to help them identify what incremental changes they can make to improve operations, boost efficiency, and drive down costs.

Each year, DC Velocity teams up with the Warehousing Education and Research Council (WERC) to look at how metrics are being used within distribution centers. This is the 14th year for this partnership, and once more, our crack research team uncovered some very interesting results (see our infographic here).

Take the respondent pool, for instance. For the first time in our survey's history, retailers made up the largest share of the respondent base, outnumbering companies from the manufacturing sector, which had long held that distinction. This is further evidence of the increasing impact of omnichannel commerce on the supply chain. Retailers, in particular, need to gain distribution efficiencies to survive in a world where nearly everything is available at the click of a mouse.

Picking and packing e-commerce orders requires a lot of labor, and labor is the biggest line item in most DC budgets. It's no surprise, then, that our study showed that companies are increasingly measuring the impact of labor on their operations. For the first time in our survey's history, four employee-focused metrics have cracked the list of "Top 12 most commonly used DC metrics." Furthermore, 62 percent of respondents ranked people as being of primary importance. To quote the study, "In an age where process improvement and technological advancement take almost every headline, our findings suggest that people are still the critical link that keeps the supply chain running."

The study also shows that companies that focus on people invest more time in their employees and maintain a higher percentage of full-time workers, resulting in better performance and lower turnover. They also make better hiring decisions. "They are more interested in the future potential of their candidates than they are in the short-term gains," the report says.

These companies typically provide more training for existing employees and are more likely to empower workers to make decisions. They trust their dedicated employees and reap the benefits. The findings show that companies that put their people first achieve better performance results than companies that place primary importance on processes or technology.

The full survey results, which will include performance and benchmarking data, will be available after the annual WERC conference in Fort Worth, Texas. To obtain a copy of the report, go to www.werc.org.

About the Author

David Maloney
Chief Editor
David Maloney has been a journalist for more than 30 years and has been with DC VELOCITY since April of 2004. Prior to joining DCV, David was senior editor for Modern Materials Handling, where he reported extensively on distribution and supply chain operations. David also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. David combines a background of reporting on logistics with his video production experience to bring new opportunities to DC VELOCITY readers, including Web-based videos highlighting top distribution and logistics facilities, Webcasts and other cross-media projects. He also is the host and producer/director of Move It!, DC VELOCITY's online program that explains "how the stuff we use everyday gets to us." David continues to live and work in the Pittsburgh area.

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