©2002GeorgiaTechInternet-basedDataEnvelopmentAnalysisforWarehousing©2002GeorgiaTechOutline•Theproblem•Thecurrentsolution•Theneed•Anewsolution•Howitworks•Internetdeploymentandresultstodate•Futuredirections©2002GeorgiaTechPerformanceAssessment•Howwellareyouperforming?•Doyouhaveopportunitiestoimprove?©2002GeorgiaTechWarehouseOperationsReceivingFunction(inbound)UnloadInspectPutAwayStorageFunctionShippingFunction(orderfulfillment)LoadPackOrderPickStorageFunctionStorageFunction©2002GeorgiaTechSingleFactorProductivityMetricsProductivity=outputinput©2002GeorgiaTechTraditionalPerformanceMetrics•Fillrate•Inventoryturns•Lines/hour•Orders/hour•$/line•$/order©2002GeorgiaTechWorkokwhen•Requirementsarenotchanging•Technologyisnotchanging•CompetitionisnotchangingIt’sveryhardtointerpretasinglefactorproductivitymetricwhentheenvironmentissubjecttorapidchangeinproducts,customerrequirements,technology,orcompetition.©2002GeorgiaTechButinadynamicworld…•Can’tcompareovertime•Can’tcompareacrosslocations•Can’tcomparetoothercompaniesAtleastnotwithoutalotofadditionalexplanatorydataandinformation!©2002GeorgiaTechBenchmarkingRelativeperformancelevel{Best(effective)practices}©2002GeorgiaTechINPUTSOUTPUTSSystem-orientedPerformanceMeasureTheNeedResourcesServicesActivities©2002GeorgiaTechTotalFactorProductivity?Can’tsolvethepricingproblem©2002GeorgiaTechINPUTSOUTPUTSONEPERFORMANCEINDEXDataEnvelopmentAnalysisResourcesServicesActivities©2002GeorgiaTechSystem-basedassessmentmethod•Resources:capital,labor,overhead•Activities:inbound,orderfulfillment•Services:lines/qtyshipped,fillrate,etc©2002GeorgiaTechComparetootherwarehousesAllotherwarehousesAllotherwarehousesinyourindustryAllotherwarehousesinyourcompanyYourwarehouseinthepast©2002GeorgiaTechProductionFunctionTheoryforoneinput,oneoutputResource/InputProduction/Output©2002GeorgiaTechSystemEfficiencyConceptResource/InputProduction/OutputOBASystemefficiencyofwarehouseBistheratioOAOB©2002GeorgiaTechDEAModel:Charnes,Cooper,andRhodesssss11min,,,..ts00sXX0YsY0,,ssConstantReturnstoScale©2002GeorgiaTechDataEnvelopmentAnalysis•Allowsustoconsidermultiple“inputs”•Allowsustoconsidermultiple“outputs”•Determinesthereferencepointontheproductionfunctionbyconstructingahypothetical“bestpractices”warehouseusingrealwarehousedata•Bestpossible*notaverage**fromdata©2002GeorgiaTechDEAPerformanceScoreContributiontoProfit©2002GeorgiaTechInput/OutputSpecification(theFrazelle/Hackmanmodel)EfficiencyWarehouseLinesShippedStorageFunctionAccumulationTotalStaffingEquipment“Replacement”CostWarehousearea©2002GeorgiaTechHtmldocumentsSolverDatabaseAtyoursiteGTServerWeb-basedToolOvertheinternet©2002GeorgiaTechOver150qualifiedusers©2002GeorgiaTechResultstoDate©2002GeorgiaTechExperience•Existingdatabase–Morethan150warehouses–Notsegmentedbyindustry(yet)–No“descriptive”datatouseforsegmenting–Cansegmentbasedoninputsandoutputs©2002GeorgiaTechOperationTyperetail30%wholesale22%manufacturing33%distribution15%©2002GeorgiaTechSize010203040506070800-100100-200200-300300-400400-500500-600600-700700-800800-900900-10001000-2000squarefoot,inthousandsnumberofwarehouses©2002GeorgiaTechCapital01020304050600-250K250-500K500K-1M1M-2M2M-3M3M-4M4M-6M6M-8M8M-10M10M-20M$(K=thousand,M=million)numberofwarehouses©2002GeorgiaTechLabor0102030405060700-50K50K-100K100K-150K150K-200K200K-250K250K-300K300K-500K500K-700K700K-1M1M-1.6M1.6M-2.5MLaborhoursNumberofwarehouses©2002GeorgiaTechKvsL0.00E+002.00E+064.00E+066.00E+068.00E+061.00E+071.20E+071.40E+071.60E+071.80E+070.00E+002.50E+055.00E+057.50E+051.00E+061.25E+061.50E+06LaborInvestment©2002GeorgiaTech%PALLETLINE0204060801001200-1010-2020-3030-4040-5050-6060-7070-8080-9090-100%PalletlineNumberofwarehouses©2002GeorgiaTech%FULLCASE01020304050600-1010-2020-3030-4040-5050-6060-7070-8080-9090-100%FullcaseNumberofwarehouses©2002GeorgiaTech%BROKENCASE01020304050600-1010-2020-3030-4040-5050-6060-7070-8080-9090-100%BrokencaseNumberofwarehouses©2002GeorgiaTechBrokencasevsPalletline01000002000003000004000005000006000007000008000000.00E+005.00E+061.00E+071.50E+072.00E+07BrokencasePalletline©2002GeorgiaTechBrokencasevsFullcase020000040000060000080000010000001200000140000016000000.0E+005.0E+061.0E+071.5E+072.0E+07BrokencaseFullcase©2002GeorgiaTechFullcasevsPalletline01000002000003000004000005000006000007000000.0E+005.0E+051.0E+061.5E+062.0E+06FullcasePalletline©2002GeorgiaTechOutputSegmentation•brokencase:49•fullcase:32•pallet:13•mix:65•total:159©2002GeorgiaTechInput-oriented,all159together0.00.51.001020all_VRS_IFrequency©2002GeorgiaTechBrokenCase,InputEfficiencyComparedWithin(49/49)0.10.20.30.40.50.60.70.80.91.001020brok_I_vrsFrequency©2002GeorgiaTechPickRateforBrokenCasePickingLines/Laborhour(brokencase)05101520250.010.020.030.040.050.060.070.080.090.0100.0Morelines/laborhourFrequencyAve=17SD=27©2002GeorgiaTechFullcase,InputEfficiencyComparedWithin(32/32)0.10.20.30.40.50.60.70.80.91.0012345678full_I_vrsFrequency©2002GeorgiaTechPickRateforCasePickingLines/LaborHour(fullcase)01020300.0010.0020.0030.0040