The Best Practices in Measuring Warehouse KPIs for Enhancing Productivity

This best practice is about measuring and improving warehouse productivity through LMS, which stands for labor management system. There are typically two segments of customers that will benefit significantly from an LMS, one is this huge ERP – vendor who supplies WMS. For example we will take SAP.  

1. SAP’s core was ERP and they still developed and integrated the WMS because many of their customers have integration challenges with other platforms. They gave them the WMS and because their core is ERP there is no solid LMS that works. They should be buying some other LMS and integrate into the SAP’s – WMS which is a cumbersome process.
2. The second thing is that there are small companies with just a hundred thousand square feet or two hundred or three thousand square feet with anywhere of revenue from 10 million to let’s say hundred million, two hundred million.

They don’t have sophisticated LMS and for that reason they are not able to measure their employees work. There are also no metrics in place and also in a general sense the argument to implement an LMS was like “you cannot manage what you cannot measure” if you want to manage obviously you have to measure and you need an LMS. 

You can measure the performance of operators, supervisors and managers along with their KPIs such as picks per hour, units per hour metric, and EPP (Employee Performance Percentage) and then post it on a notice board on a daily basis. The fact that the personnel is measured and their KPI’s getting posted on the board gives you a productivity boost of 7%. Personnels will now do the job perfectly for the fact that you’re measuring and posting their KPIs. 

If you start doing it even efficiently and optimally, you can gain more throughput. That’s the value prop for LMS, but it was expensive before but now it’s not the case, I mean there are many LMS available that even small enterprises can have. If it is to be integrated in their existing WMS systems – it’s still not a super complex process. 

It can be done quickly almost like a plug and play technology. So that’s something to think about and if you’re managing a big labor pool with multiple shifts and see a big opportunity from a labor perspective and start optimizing certain things such as these labor metrics, that will definitely help in pushing the productivity levels to the maximum. Please share your thoughts in the comments section.