MHI Solutions Improving Supply Chain Performance
Click here to read the full article in the digital version of MHI Solutions.
“You can’t manage what you can’t measure.” You’ve probably heard that Peter Drucker quote a few times. In light of the events of the past 24 months, it turns out you can’t manage what you can’t control either. And not a whole lot was in the control of facility managers, directors, supervisors and C-level executives when it came to supply chains in 2021—which negatively impacted warehousing and distribution performance.
The Warehousing Education and Research Council (WERC) and its members are keenly interested in both good and bad performance, however. That’s why, for the past 19 years, we’ve conducted an annual benchmarking study of the key warehousing and distribution metrics used by operations professionals.
Our goal is to eradicate bad warehousing practices by giving practitioners a tool to benchmark their own performance against others in the field and to chart their own course of improvement. Or, in the case of this year, maybe also get a little validation that theirs weren’t the only operations frantically trying to change the tire while the car was speeding down the freeway.
The most recent report, DC Measures 2022, is based on a survey conducted in January of this year. Participants submitted their actual levels of performance for 2021. Produced with support from Kenco, Yale Materials Handling, Fortna | Optricity, and our research partner, DC Velocity, the study was again conducted and reported by:
- Joe Tillman, WERC Researcher
- Karl Manrodt, Ph.D., Professor of Logistics and Director of the Master of Logistics and Supply Chain Management Online Program at Georgia College & State University
- Donnie Williams, Ph.D., Clinical Assistant Professor and Executive Director of the Supply Chain Management Research Center at the University of Arkansas
The trio reviewed the data across multiple demographic areas, including industry, type of operation, customer served, business strategy and company size. With the pandemic-related supply chain upheavals, the findings across the categories of customer, operational, financial, capacity/quality, and employee/safety (plus perfect order and cash-to-cash cycle management) illustrate many of the challenges these operations faced.
I recently talked with the research team about their survey findings and insights. The following is an excerpt of that conversation.
Mikitka: Can you share a little about the practitioners who completed the survey?
Tillman: The top four industries represented were wholesale/distributor (29.8%), manufacturers (20.2%), third-party logistics (3PLs) (18.6%), and retail (17.7%). Companies of all sizes participated, with more than half having annual sales between $100 million and $1 billion (53.3%). The top four facility types represented include omni-channel (35%), regional (17%), wholesale (15%), and centralized (13%).
Williams: Among respondents, most (65.1%) are picking cases with broken case picking the majority type of operation.
Partial pallet operations increased more than 130% over last year, likely due to trucking issues. Companies are picking and shipping partials to stores as soon as they are received to keep shelves stocked.
Tillman: End customers are still placing smaller, more frequent e-commerce orders. We found a 20.4% jump in the number of participants identifying them as their primary customer over the last report.
Click here to read the full article in the digital version of MHI Solutions.