Without a fitness tracker, gauging how many more steps one needs to take is dependent on his personal feelings. And personal feelings give mixed responses as to their accuracy. Sometimes they are right on, or drastically off. It is like saying, “I feel like I’ve taken 10,000 steps,” rather than objectively knowing that one has. Exercise, regardless of the number of steps, is good, but having a realistic objective with a tool to discern where one currently is at, keeps him on track to reaching that goal. Knowing where one is and where one needs to be should help increase his productivity.
At Burris, our fitness trackers are our Key Performance Indicators, or more commonly referred to as KPIs. Through captured data, they gauge where we are currently at and where we compare to our previously stated goals. There are multiple KPIs at Burris to gauge the different aspects of our Logistics’ productiveness like Throughput, Cost Per Case, Productivity, Accuracy, Safety, Damages, Compliance, and Retention. These KPIs are used to simplify the jobs inside our warehouses and to fine tune our warehouse operations system.
- Throughput indicates how effectively the warehouse team operated as a whole during their shift. It measures the number of units shipped/received by the hours used to process those units.
- For example, if 10,000 cases were processed in 100 hours, the throughput would be 100 cases per hour. If the throughput goal is 100 cases per hour and there are 100,000 cases that need to be processed, you have a max of 1,000 hours to accomplish that objective. In order to get those 100,000 cases finished in a 10 hour shift, the 100,000 cases divided by the 1,000 hours to accomplish the objective indicates that 100 team members should be on the floor to reach this goal. If there are more team members on the floor, then this objective should be achieved sooner than the allotted time of 10 hours.
- Cost Per Case is the work week’s total labor cost (each warehouse team members’ pay added up) out of the total number of cases shipped. In order to find the Average Hourly Rate for one’s team, that week’s total labor cost must be divided by the number of hours worked. Knowing what a team’s hourly rate is determines whether that warehouse’s standards are where they currently need to be at.
- Productivity for each warehouse team member is dependent upon their particular position, yet safety and maintaining industry standards are always paramount. While the warehouse team maintains a common objective, each job procures a nuanced productivity goal.
- For example, forklift operators’ and loaders’ work is measured by the number of pallets moved per hour, while selectors’ jobs are gauged by the number of cases distributed each hour (the industry standard is currently 250 cases per hour). For loaders, un-loaders, lumpers, and haulers, the aim is to load/unload the truck in less than 2 hours.
- Accuracy is determined by an error percentage, where the number of incorrectly selected or received cases are measured out of a thousand. Through scanning the cases and pallets, utilizing voice and conventional selection, and hiring auditors, the warehouse is able to maintain a lower error percentage.
- Safety in the warehouse is measured by the OIR (Overall Incident Rate) and LTIR (Lost Time Incident Rate). Fewer accidents occur when precautions like accountability, safety talks, drills, reviews, and managers practicing what they preach are respected.
- Damages that are overlooked can put a halt to a smoothly running warehouse. Simple precautions and trained reactions like making sure pallets are fully shrink wrapped and not receiving damaged products save time spent on jobs that will have to ultimately be redone.
- Compliance to industry standards and regulations (e.g. OSHA and USDA requirements) leads to a safer, cleaner, and more organized work environment.
- Retention is the measured percentage of team members who remain with the company from the beginning to the end of a period. Uplifting communication and comprehensive training help to maintain a high retention rate.
Each of these KPIs are looking out for the safety and well-being of our warehouse team members. Like a fitness tracker, it shows us where we are currently at and in what areas we can progress. It may not always tell us what we want to hear, but it encourages us to reach the place where we ultimately want to be.
This has been a brief overview on Key Performance Indicators, but there is so much more to learn. Most of this content was pulled from Burris’s very own Steve Cunrod and his presentation at the Global Cold Chain Expo. His focus is on building stronger teams, which is why he uses KPIs. Thank you, Steve, for making our warehouse team members’ jobs easier, better, and more efficient!0 No Comments Yet