Fleet Management & Forklift Safety Blog

Measuring systems ROI: The pitfalls and ways out

Posted by Brian Quigley, Director of Client Services on Dec 3, 2015 4:00:00 AM

Decision-Making.jpgWarehouses are growing smarter by the day, but how do you know your investments are paying off? Are you taking advantage of – and acting on – real-time information? Do you know what you are measuring and why?

 Several studies have recently showed organizations are wisely putting increased focus on the role analytics can play in improving operational efficiencies, and, as a result, ROI.

 As you seek to do the same, it pays to immediately identify and promptly eliminate the obstacles to measuring warehouse systems ROI. For example, if you are relying on the following methods, the results will be flawed, doing little to help you determine whether your system is performing at an optimal level:

  • Limited scope of measurement: Ignoring things that are hard to measure will yield incomplete and inaccurate results. Measure inputs are necessary to understand outputs.
  • Coincidental factors: Trying to understand how a system is performing with anecdotal information or a one-time measurement will provide few useful results. Some things improve with time and training while others degrade as workers and systems develop bad habits. In addition, the Hawthorne effect – the idea workers modify their behavior in response to being observed – can temporarily sway the metrics.

So what would be a more effective plan of attack to measure warehouse systems ROI? I would suggest:

  • Take a holistic approach, including all systems and channels: How do they work together? Are they being fully utilized? Are they integrated? Systems do not naturally “talk” to one another.
  • Incorporate transformational thinking, taking metrics beyond the simple one-time test status toward enterprise-wide adoption.
  • Leverage the latest technology, not simple regression models, to provide multi-perspective, real-time information.

To take it further, also bear in mind:

  • Continuous testing is impossible, but continuous measurement is not. The key component is real-time visibility into every aspect of the operation. Real-time visibility, in turn, is dependent on accessibility. Users should be able to gather data in an intuitive fashion. Real-time dashboards and the ability to monitor the drivers of system performance in a day-to-day work environment fall within the expertise of TotalTrax.
  • Test new standard operating procedures and adopt them when successful.
  • Give managers tools to adjust to changing work conditions and business cycles.
  • Leverage power of LMS and WMS by integrating real-time data.

 To determine your systems are delivering value to your operation, you need to get the measurements right. In that quest, real-time information must stay in the forefront.

Topics: real-time visibility, systems, ROI

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