Performance against DC metrics may be starting to plateau

What goes up must come down … and based on what we're hearing from respondents to this year's study of distribution center metrics, that may well be the case when it comes to warehouse and DC performance.

The 2015 research—our 12th annual study—was conducted among DC Velocity readers and members of the Warehousing Education and Research Council (WERC). Respondents were asked what metrics they use and how well their facilities performed against more than 40 metrics in 2014. We'll detail the results in DCV's May issue, but in the meantime, here are a few highlights. When it comes to how facilities are performing against the metrics tracked in the study, improvement seems to have stalled after last year's peak. In the 2014 study (which asked about performance in 2013), respondents reported that they had improved (or at least maintained) their performance on a year-over-year basis across a majority of the metrics. For instance, both the "best-in-class" respondents (the top-performing 20 percent of survey participants) and the "major opportunity" respondents (the bottom 20 percent) improved or maintained performance on 32 of the 44 metrics tracked. The "median" performers (the middle 20 percent) made even greater strides, improving or maintaining performance on 36 of the 44 metrics.

The 2015 survey (which covers performance in 2014) indicated that both the "major opportunity" and "median" performers had lost some of that momentum, with the "major opportunity" companies improving or maintaining performance against only 21 metrics, and the "median" performers just 26. Of the three groups, the "best-in-class" performers made the best showing, improving or maintaining performance on 29 metrics. Where did they make those improvements? In the case of "major opportunity" performers, much of the progress was made against metrics associated with the "Perfect Order"—order completeness, timeliness, condition, and documentation. Interestingly, the "major opportunity" performers were the only group that improved against all four of these measures. The survey results also pointed to improvements in operational performance. Both "best-in-class" and "median" performers made gains against what the study categorized as "operational" metrics—measures used to assess internal performance, such as order fill rates and lines received and put away per hour.

In addition to the upcoming DCV article, the study results will be presented at WERC's annual conference, scheduled for May 3–6 in Orlando, Fla. For more information, go to www.werc.org.