Measure And Improve Warehouse Performance

Tools to help you improve efficiency, profitability and customer satisfaction.

There’s an old saying that you can’t improve performance until you measure performance. This article will provide the tools you need to quickly assess your warehouse and delivery operation. Knowing your strengths and weaknesses will allow you to focus on key issues. Your team will then be able to resolve problems that affect profitability and customer satisfaction. A major consequence of focusing in this way will be to generate valuable word of mouth advertising and competitive advantage.

Below you will find a self appraisal checklist for the operations side of furniture retailing. Copy this form and distribute it to members of your team (or e-mail russ@furninfo.com to get a full page pdf version e-mailed to you at no-charge). You can choose to have every member participate or just key managers. For the process to be successful, each person should rate every question. Results should then be scored and discussed in a team environment. If your store scores a three or less, you have problems that need to be addressed. Start looking at areas that received the lowest scores first and those that are especially important to your goals for customer satisfaction.

Use the “total” space to compare multiple stores. You may also want to compute the average rank for each question in multiple store operations. That way you can identify and focus your attention on low performing areas in specific stores.

Once problem areas are identified, you can initiate programs to improve the operations efficiency of your organization, agree on specific objectives, assign responsibilities and establish follow-up dates.

Qualities Of Outstanding Retail Warehouse & Delivery Operations

Whether your company is large or small, giving superior delivery performance is the proven key to maintaining customer satisfaction and retention. It is crucial to success.

The following bulleted points are all related to management skills for people and processes. Just as there is a right way and a wrong way to write up an order, your operations people have to do the right things in the right sequence. You have the responsibility to hire and train the people to do the job.

•There should never be any question about the amount of inventory on the books or what is actually in the warehouse. You should be able to promptly find anything at any time.

•Some warehouse repair areas are like the classic Maytag ads and others are disaster areas where control is clearly lacking. For every inventory dollar tied up in the repair shop, there is generally another dollar of saleable goods that cannot be delivered. When a vendor does not ship quality goods, charge backs are appropriate, but only on a fair and documented basis.

•Before goods are released to customer pickup or delivery, they should be prepped to the accepted quality level for your price point and customer perception. Acceptable quality has different meanings to retailers but you know poor quality when you see it with your own eyes.

•Customer pickup should be completed on time and customers should have satisfactory accommodations during their wait, or be directed to do some more shopping while their order is being brought to the shipping dock. Don’t forget the waiver of liability requirement so you are not responsible if they have an accident on the way home.

•Delivering the goods is your first opportunity to build customer relationships in preparation for repeat purchases and to minimize service calls. Do it right the first time. Remember that your delivery operation, which includes people and equipment ARE your store image as they drive down the highway or enter a customer's home.

•The best managers visit their warehouse at least a couple times every day. Use your visits as an opportunity to get to know your people, coach them and tell them that they are important to the overall success of your operation. Point out successes with recognition awards.

•Break and rest room facilities for warehouse employees should be equal to those available to other office workers.

•In many situations, additional brick and mortar investments are not required if inventory is brought under control. This means selling off the "dogs" at whatever price they will bring, managing sold but not delivered goods and repairing non-saleable items.

•There isn’t an exact formula for warehouse operations but there are some basic indicators you should monitor. One of the simplest is adding the total number of pieces received and shipped and then dividing by the total number of labor hours that day. Another is to keep track of warehouse capacity. When your inventory is over 85% capacity, productivity will dive and damage will increase.

•Some retailers have the internal skills to improve their internal operations while others need help to achieve their objectives.

WAREHOUSE AND DELIVERY CHECKUP CHECKLIST
Have members of your team rank each question posed by both circling the number and writing it in the space provided. For multiple stores, add an additional (rank) column for each store or use a separate form. Add up total scores in the rank column to compare stores. To receive a full page electronic (pdf) version of this form, please contact russ@furninfo.com.

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Daniel Bolger of The Bolger Group helps companies achieve improved transportation, warehousing and logistics. Questions can be directed to Mr. Bolger care of FURNITURE WORLD at dbolger@furninfo.com.