Warehouses are an expensive and essential part of the supply chain.
Warehouse operators heading into peak will have the daily challenge of handling volatile volumes and perhaps even more challenging, working with inaccurate forecasts.
Those two scenarios combined make space planning an art form not a science as it does too when it comes to resourcing the operation for the safe delivery of service. All whilst minimising spare capacity – it’s not easy to contain costs in this context.
Most warehouses measure productivity using ‘units per hour’ (UPH) which as a guide is a time old indicator of where the warehouse is tracking. Most experienced operators will compute an order well against recent levels of UPH to gauge the resource need and if there’s a capacity issue looming.
When it comes to optimising and managing costs and investment in automation, a great deal more precision is needed.
We have looked at data from over the last 4 years of for warehouses serving ecommerce, wholesale and retail sales channels and can find a number of benchmarks and trends.
Lost time at the beginning and end of shift is relatively well known and understood. What isn’t known unless there are systems in place to capture it is mid shift lost time – it is higher than most customers anticipate and one of the easiest to improve, almost immediately.
Benchmarking is always of interest and we provide this service for customers, it is particularly advantageous for those seeking to automate their operations – how much cost is trapped and invisible?
A line in the sand showing metres being travelled, locations being visited, hours spent on and off direct tasks, units being move and the profile of such movement, the prevalence of lines and locations moving and not – it’s essential to have these before automation is deployed because it enables a ‘before and after’ analysis and can help identify or explain variations to the key assumptions contained within the business case.
An LMS is a safer route to automation investment than UPH.