The performance function for the “Safety equipment used” should be binary. This means that the metrics can be in the green zone (have 100% performance) only if 100% of the used equipment is adjusted to the current safety standards.
The Safety standards awareness metric should have a specific performance function as well. It allows a certain margin between 100% awareness due to the normal fluctuations in staff and standards change, but the scale should be much more aggressive compared to a standard line growth function.
I see several reasons why the warehouse should have a properly designed strategy scorecard.
It helps to describe a warehouse strategy, have a big picture view and know growth points.
It allows to align supply chain strategy with overall company strategy.
It focuses performance measurement efforts beyond simple process metrics.
Below, I’m following the logic of the Balanced Scorecard framework to create a strategy map template for the warehouse. If you want to learn more about the framework, I recommend this article to you.
The financial goals of the warehouse are related to optimizing running costs.
Business goal: Optimize Costs
Shipping Cost Per Line
Errors cost per type of error
The stakeholders of the warehouse can include suppliers, clients, warehouse team, logistic personnel. Respectively, the goals of the customer perspective can be formulated around the needs of these stakeholders.
There are two goals to map in the Customer perspective:
Improve Efficiency and Productivity
Business goal: Improve Efficiency and Productivity
Receiving Labor Productivity
Omni-channel fulfillment centers
Business goal: Improve Safety
Time lost due to injury
Accidents per year
Near miss issues reported
The goals of the internal perspective are supposed to answer the question: “How are we going to satisfy the needs of our stakeholders?” The improvements might be focused on the goals discussed in this section.
Accuracy Index (as measured according to accuracy indexes on all steps of the warehousing process)
The weights of the indicators that form the accuracy index can be equal or can be adjusted to the current strategy, for example, by giving a Shipping Accuracy higher weight compared to other indicators.
Additional metrics should be introduced when specific initiatives are implemented.
The Layout Reevaluation should be programmed to be updated with a certain period of time depending on the type of the products stored. In this example, it is updated Quarterly. Obviously, the value of this indicator cannot be inherited from the previous evaluations, and to reflect this, I’ve picked the “Entered values” option in BSC Designer software.
Effective and safe layout goal can be further supported with various improvement initiatives:
Maximize vertical space
Design ergonomic workspaces
Behavior-based safety program
Safe routes, traffic lanes, crash barriers
External warehouse layout
Evaluate storage equipment
Learning and Growth Perspective
In the learning perspective, we need to map goals that will help to focus learning efforts. What information about the stakeholders will help to make better decisions? What IT infrastructure will help to serve warehouse stakeholders better? What changes in management can lead to achieving internal goals?
A warehouse today should adapt to the fast pace of stock turnaround, new technological and logistical challenges.
In this article, we discussed the basic process metrics that will help to achieve excellence in warehouse operations, as well as an example of a strategy map template that will help to align warehouse strategy with the overall needs of the organization.
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