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News & Press: News Stories

WERC’s 2019 Annual DC Measures Operational Benchmarking Report

Monday, May 6, 2019  

Oak Brook, Illinois – April 20, 2019 – The DC Measures 2019 annual benchmarking study of key warehousing and distribution performance metrics has been released by the Warehousing Education and Research Council (WERC), WERC.org. The study captures the 34 key operational metrics of particular importance to most distribution professionals, grouped into five categories: customer, operational, financial, capacity/quality and employee (plus perfect order and cash-to-cash cycles). Its contents help warehousing managers, directors and supervisors—and their C-level bosses—compare their operations against others in the field to improve their own performance. Details about how to purchase a copy of the report can be found here.

Conducted in January, the 2019 version of the DC Measures survey asked participants to share their actual performance levels from 2018. The data is reviewed across five demographic areas: industry type, type of operation, customer served, business strategy and company size. With 15 previous years of data sets available, the report also includes a review of developing trends.

Individual responses from 489 participants were received, with the largest group of respondents reporting their title as “manager” (47.8%); 33% of respondents indicate they report directly to the C-Suite. In terms of industry type, wholesalers/distributors were the largest group of respondents, at 28.6%, followed by manufacturers at 26.4%, third-party warehouse operators at 19.5% and retailers at 16.0%. (This is a shift over 2018’s report, which saw more responses from manufacturers and retailers than any other category.)

The top three facility types represented by survey participants are regional (30%), centralized (19%) and wholesale (19%). Their companies report annual sales less than $100 million (30.8%), between $100 million and $1 billion (40.8%), and greater than $1 billion (28.4%). With regard to what’s being picked, the majority of facilities (64.4%) pick full cases as opposed to pallets, and 51% say their customers are either end consumers or retailers.

Respondents report that their top business and operational strategy remains customer service (40.9%), as it has for the last three years. This surpasses a mixed strategy of being all things to all people (37.3%), a cost leadership strategy (16.0%), or a product/market innovation strategy (6.2%).

The most popular benchmarking metrics used have shifted over the previous year’s report. In 2018, five of the top 12 metrics focused on employees; the 2019 DC Measures study notes that only two employee-focused metrics remain in the top 12. Instead, operations are prioritizing quality and capacity, with the top five metrics being: 

  1. Order Picking Accuracy (percent by order)
  2. Average Warehouse Capacity Used
  3. Peak Warehouse Capacity Used
  4. On-time Shipments
  5. Inventory Count Accuracy by Location

As with the previous iterations of the report, the gathered benchmarking data is reported using a “quintile” format, which evaluates the data on a five-point maturity scale. This structuring methodology reflects where respondents are situated with respect toward having achieved a “best practice” within a given metric. To be considered “best-in-class,” performance levels must fall within the top 20% of all respondents.

“When we looked at how respondents’ operational performance declined, improved or remained the same year-over-year in conducting this study, what jumps out is how difficult it is to maintain consistent performance over time,” says lead WERC researcher Joe Tillman, Founder of TSquared Logistics. “Performance management truly thrives on consistency—proven in the finding that the best-in-class operations did the best in maintaining their performance levels in 11 of the 36 total measures, and improved in eight. In most cases for best-in-class operations, the only way to achieve higher performance is to commit to significant investment and risk.”

As for the rest, the median performers improved in 13 of the 36 measures, declining in 14. Operations with major opportunities to improve performance made significant gains in the 2019 findings over the previous year, with improvements in 12, maintained in 10 and declined in 14 measures. “The median and major opportunity groups made significant strides,” Tillman adds, noting that the full report takes a closer look at these findings, as well as explores the significant shift in top 12 metrics away from an employee focus.

“We’ve also been collecting data over the past several years regarding supply chain and workforce flexibility and agility,” he continues. “Warehousing and distribution networks continue to grow more complex, while the partners within supply chains demand more speed and a higher degree of responsiveness. For that reason, the 2019 DC Measures report offers insight into the intersection of people, processes and technology and continuous improvement.”

Customized Reports Available

To help companies better refine their metrics analysis process, relative to DC Measures findings, WERC offers customized comparative benchmarking reports. These present a company’s individual data in an Excel spreadsheet format as compared to the study’s findings as based on type of industry, operation, customer, business strategy or size of company (based on sales).

About the Study’s Research Team

Produced with support from Kenco Group, Yale Materials Handling, and the United Kingdom Warehousing Association (UKWA), the research was conducted and reported by:

  • Joe Tillman, WERC Researcher and Founder of TSquared Logistics
  • Karl Manrodt, PhD, Professor of Logistics and Director of the Master of Logistics and Supply Chain Management Online Program at Georgia College & State University
  • Donnie Williams, PhD, Clinical Assistant Professor and Executive Director of the Supply Chain Management Research Center at the University of Arkansas

DC Measures 2019 is available here and priced at $175 for WERC members; non-members can purchase a copy of the report for $550. Survey participants will receive a complimentary copy by email.

For additional information, please contact Michael Mikitka, mmikitka@werc.org or 630.990.0001.

 

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About WERC
The Warehousing Education and Research Council is the only professional association focused exclusively on warehouse management and its role in the supply chain. Members are experts from all facets of the distribution industry who come together to share practical knowledge and professional expertise to improve individual and industry performance. Learn more at www.werc.org.