The role of the Distribution Center (DC) is to provide the right product, at the right place, at the right time, free of damage and at a competitive cost. DC metrics measuring performance are at the core of a distribution center’s ability to achieve and maintain these objectives.
The effectiveness and efficiency of the distribution center can be affected by a multitude of occurrences. What DC metrics do you use to make sure your distribution centers are running optimally? Are you using the same DC metrics this year as in previous years, or have things changed?
Distribution center metrics most common to measuring performance include handling productivity, space utilization, accuracy, damage, service, cost and inventory. Cycle times are also critical in determining the distribution centers levels of service and efficiency.
Each year Karl Manzodt and the Warehouse Education and Research Council (WER) release their annual “DC Metrics” report of which the results were recently published in Supply Chain Digest. Take a look at the top 12 list for 2015 as compared to the top 12 from the previous two years:
It should come as no surprise that with the 2014 west coast port disputes, that all things related to performance showed up higher on the list of DC metrics as compared to previous years. The top 4 have remained consistent since 2013 with the exception of Dock to Stock Cycle Time, a critical measure of how long it takes to make material available following receipt, which switched places with Total Order Cycle Time. Total Order Cycle Time, a measurement of elapsed time from order receipt until order shipment can also include transportation time to measure the total elapsed time until the customer receives the product. Additionally, the need to monitor Inventory levels more tightly during the west coast port disputes resulted in DC metrics measuring warehouse capacity and backorders, such as Backorders as a Percent of Total Order or Backorder as a Percent of Total Lines, moving up on the top 12 list as compared to previous years.
Today’s organizations are looking to newer ERP solutions to help them manage and identify bottlenecks sooner rather than later. ERP solutions and technologies have advanced tremendously in the last decade and more than ever before, newer ERP systems are helping businesses increase their competitiveness and profitability through improved efficiencies and cost savings. Operational efficiencies are at the core of today’s successful business, and targets and performance metrics must be identified and measured so proactive actions can be taken.
Do you know the DC metrics that are most important to your business?
2W Tech, an Epicor Platinum partner, offers a team of professionals that are ready to answer your questions about Epicor ERP. Let the experts at 2W Tech help you build a strategy and identify which key performance measurements are most applicable to your business. By identifying and understanding your organization’s targets, you will have access to real-time metrics that will show your strengths and weaknesses so you can be better prepared to make quick, accurate decisions in today’s global market.