While most customers do not know what goes on in retailers’ warehouses, they can often tell how efficient merchants are at utilizing these storage centers based on how well the shelves are stocked and how long it takes them to receive an online purchase. A productive and efficient warehouse is a critical piece of the puzzle for merchants looking to achieve customer satisfaction.

While there are numerous steps sellers can take to bolster warehouse productivity, one of the best solutions is making better use of key performance indicators. As Multichannel Merchant contributor Curt Barry explained, metrics and goals help to focus warehouse employees around specific objectives. Yet many warehouses are not transparent with their goals, which may cause motivation issues if employees are unable to see how they directly affect productivity.

Setting goals and using the right KPIs sounds obvious, but it is something most warehouses are not doing or could improve significantly in executing.

“Most multichannel operations should smartly invest in material handling equipment, sortation etc,” Curtis explained. “But future productivity comes from people making it happen: Handling more calls per hour, shipping more packages per hour, increasing on-time shipment, reducing error rates.”

Setting better goals and bolstering KPI transparency

The first step to a more productive warehouse is setting effective goals and communicating these objectives to employees more effectively. Many retailers fail to understand the importance of communicating results and objectives with employees – knowingly or not, upper management often keeps this information secret and away from warehouse workers.

But how else can they know whether the work they are doing is unsatisfactory? Retailers should never ignore the importance of self motivation. If employees were unaware that the warehouse was not operating as quickly as it should be, how can management expect them to pick up the pace?

Retailers need to keep employees in the loop. While they do not need to disclose everything, they should make it quite clear why achieving certain goals and objectives is important to warehouse staff. This will not only provide some rationale for major changes, it will also help employees understand where they fit into the company and how important their job is to the overall success of the business.

Goals should be set on a department level (trying to improve number of picks, accuracy and other aspects) as well as on a department-wide level that helps to unify all employees. Gerkes & Associates noted that when developing KPIs and objectives, the key is driving strategic value. This approach helps organizations continually move in the right direction in the long haul.

Improve reporting

KPIs are only relevant when they are collected and analyzed on a regular basis. Reporting is crucial for helping retailers stay on track with their warehouse operations while also keeping employees motivated and moving forward. Reporting should be done on a daily basis, with weekly, monthly, quarterly and annual reports acting to consolidate all the different information.

Report results should be featured prominently within the warehouse to provide some form of feedback to warehouse employees – these daily results can help them prioritize tasks effectively in the day to come. For example, if they see only a certain percentage of the truck was unloaded, they know they need to work on unpacking the rest of the truck. Or if the number of orders picked dropped, they know they must step up in that area today.

“On the low investment end, hang a whiteboard in a high traffic area reporting yesterday’s production results. Examples in the DC might include packages shipped, types of errors/ inventory adjustments, or receipts processed. Call center metrics could be calls handled, abandonment rate, orders taken or – be brave – daily sales,” Curtis added.

Give warehouse employees the tools they need to succeed

Warehouse productivity does depend significantly on setting the right goals and objectives as well as keeping people motivated, but retailers must also give employees the tools they need to succeed. Retailers cannot just continually raise expectations and expect workers to keep up unless they invest in them.

Coaching and training is an important contributing factor. Do employees understand how to pick, pack and ship products as quickly as possible? Are they efficient in their ability to offload trucks and log products in and out? Proper training can go a long way in that regard.

Another way to improve warehouse productivity is by giving employees tools that can make their jobs easier. For example, mobile picking tools allow warehouse employees to checkout items straight from the shelf instead of having to go to a standalone station to do so.

Warehouse productivity is important, and with the right goal making, reporting and provision of tools and training, merchants can improve this aspect of operations.