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Focus: Distribution/Materials Handling

Feature Article from Our Distribution and Materials Handling Subject Area - See All

From SCDigest's On-Target E-Magazine

- May 9, 2013 -

 
Logistics News: 10th Annual DC Measures Shows Companies Have Become Really Good at Logistics, as Most Measures have Plateaued at High Levels


Differences Between Leaders and Average Have Really Collapsed in Recent Years

 

 SCDigest Editorial Staff


At the recent Warehouse Education and Research Council's conference for 2013 in Dallas, the annual "DC Measures" report was released in both document form and in a presentation from the researchers behind the report, Dr. Karl Manrodt of Georgia Southern University, and Kate Vitasek and Joseph Tillman of consulting and training company Supply Chain Visions.

SCDigest Says:

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All told, the data suggests there really isn't that much difference in distribution performance between the leaders and the average company.
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In a very real sense, the news this year is that there is no news, as company performance in areas related to logistics and order fulfillment seems to have reached a plateau - at very high levels.

Case in point: you can't get any better than 100% on-time shipments, and again this year, the leaders (top quintile, or 20% of respondents) in the study are almost there, have reached 99.8% every year in the study since 2008. At the top, there is simply not much room for improvement, as seen in the figure below.

While the actual chart accentuates the differences between leaders and the median performance level based on the numbers selected for the Y-axis, even the average performers are hitting 98.9% on-time shipping performance, less than one percentage point below the leading companies.

SCDigest notes that if the data was measured for on-time deliveries instead, the percentage levels for leaders and average would certainly drop by a decent number of percentage points.

There are similar results in most other categories of this year's survey. For example, for the metric of "line-level fill rates" for customer orders, the top quintile has been in the 99.9% range (that actually seems a little high to us) since 2007, while the median level has been largely around 98% over the same period.

All told, the data suggests there really isn't that much difference in distribution performance between the leaders and the average company. It is likely that much of the small difference between the leaders and median performers can be connected to differences in industry sectors.

 

Source: WERC 2013 DC Measures



There was some volatility this year again, however, on what are the most popular distribution and logistics related measures. The study determines that ranking by the percentage of respondents actually supplying data for a given metric in their survey responses.


(Distribution/Materials Handling Story Continues Below )

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As can be seen, "internal order cycle time," or the time from when a customer order is received to when it is ready for transportation, rose to the number 2 spot from the number 5 position in 2012. Last year's number 2 metric, order picking accuracy, fell in turn to the number 5 spot, as shown below.

 

Most Popular DC Measures for 2013

 

 

Metric
2013
2012
2011
On-Time Shipments
1
1
1
Internal Order Cycle Time
2
5
6
Dock to Stock Cycle Time
3
4
5
Total Order Cycle Time
4
6
7
Order Picking Accuracy
5
2
3
Lined Pick and Shipper per Hour
6
8
8
Lines Received and Put Away per Hour
7
11
9
% Supplier Orders Received Damage Free
8
12
10
Warehouse Capacity Utilization
9
3
2
Order Fill Rate
10
out of top 12
out of top 12
% Supplier Orders Received with Correct Documentation
11
out of top 12
out of top 12
Pear Warehouse Capacity Used
12
7
4

 

Source: WERC 2013 DC Measures

 

Finally, we’ll offer a look here at some of the overall results, here with a graphic on one of the charts in the report, but representing only about half of the benchmarks included in the research. Each metric is broken down as usual by quintile for each metric and then the median score. SCDigest will just note again that the differences between quintiles seems to continue to shrink.

 

In total, we believe this year's data shows a continuing push towards what SCDigest has said is a coming new era of perfect logistics.

 

The full report is available for free for WERC members and for a modest charge for non-members.


Any reaction to the 2013 DC measures? Are you surprised there is such little difference between leaders and average? Let us know your thoughts at the Feedback button below.


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