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Lean Appropriate KPIs for a Distribution Centre

J

jsheb

#1
Hi All,

I'm not sure if this is the right section of the forum to post this but here it goes:

I am currently working in a distribution centre in Europe. The company has already implemented Lean throughout the organisation and changes are already visible on the warehouse floor (although many warehouse employees just want to do what is told and get out - but that's another point), so this is not the typical Lean transformation project. They have also introduced the concept of Operational Excellence a couple of years back (it is a major management initiative). Local management are a bit puzzled as to how Lean and OE can work hand in hand; they are both measured separately. This is where we come in: we are trying to analyse how Lean is being used by the company in order to achieve Operational Excellence. Each has their own scoring and we are trying to find correlations between them both so as to show how they can work perfectly hand in hand. Firstly I would like to know if the KPIs already in place are appropriate as they seem to have not been any changes in the KPIs over the years. They seem to be more focused on cost then on what is valued by the customer.

I would like to know your expert opinion on this matter please:
1. Are these KPIs are the most appropriate in order to be Lean and achieve operational excellence? (I did not select all of the KPIs to display here)
2. Many of the KPIs are actually targets (an amount, in cash or time); for me a KPI should be a measurement/per unit (time or cost...). Is that considered as a KPI in your opinion?
3. Are there any other KPIs which you propose?

Cost of line shipped/received ($)
Cost per function as % of sales
Incident Rate (target: 0)
Inventory reduction
WIP (in days)
Inventory accuracy (%)
Quarterly saving per function ($)
Receiving Rate (#/hr)
Emergency shipments (time)
Outbound loads/hr
On Time Staging (%)
Slotting Accuracy (%)
Allocate to Stage time (time)
Identify-to-Putaway time (time)
Stage to truck (time)
Claims handled (time)
DPMO of X per team in the WH
Six Sigma project savings ($)
Successful A3's
Training attendance (%)
Cross training (%)

Thank you all for your help!
 
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L

lokeky1

#2
Hi jsheb,

a) Lean is a measure of how fast a material flow from receiving to dispatch (door-to-door).

b) KPIs, Targets, objectives are quite similar in nature. I can't tell what is for lean and what is not. The general characteristics of "lean" is the KPIs (targets etc ...) must be visible to all stakeholders and must be monitored on a more frequent interval (hourly, 2 hourly or daily).

c) I think there are quite a lot of KPIs already. How do you keep track of them? Are there possibilities that some of these KPIs are working against each other? Having said that, I would like to propose one more if it is not already there. It is Inventory Turns.


Hope this helps.
 
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