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Gauging Best-in-Class Fulfillment

Pressures in the warehouse are causing managers to look for solutions that make their workers more mobile, more event-driven and real-time responsive. However, according to research funded by Kenco, providers of public warehousing and transportation services, in conjunction with The Aberdeen Group, many have not yet adopted the underlying process and technology enablers to help them achieve these goals.

The report generated from this research, titled “Fulfillment Excellence and Dynamic Event Warehousing Come of Age,” benchmarks the best-in-class companies, as well as requirements for success. The research uses three key performance criteria to distinguish best-in-class companies:

• 97.8 percent perfect order rate delivered to customers complete and/or on-time

• 3.7 percent decrease in warehouse labor costs per unit handled per year

• 2.6 percent decrease in actual warehouse operating costs versus budget YTD

Top pressures in warehousing and fulfillment services identified by the 134 executives responding to the study include customer demands for value-added services; the need to manage multiple sales/logistics channels; the need for better utilization of resources; and the proliferation of SKUs, sizes and packaging.

The best-in-class companies (top 20% of performers) have been best at balancing the competing pressures and have the following key advantages:

• Delivered a 3.7% decrease in warehouse labor costs per unit handled, year-over-year, vs. a 3.6% increase for laggards (the bottom 30% of performers);

• Best-in-class and industry average companies achieved perfect orders (complete and on-time) over 95% of the time, while only 19% of the laggards were able to meet that performance level (laggards averaged perfect orders 91.6% of the time.

The researchers state that in today’s customer-centric supply chains, missing on more than five out of 100 orders is not business-sustainable for most industry segments.

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