2.2.2. Warehouse performance assessment
With the upgrade of the production came the need to look at better performance of the
warehouses. The urge for measuring warehouse performance is provoked by internal issues (e.g.
space utilization, inventory accuracy, safety and housekeeping), external issues (order accuracy,
stock-outs, complaints) and performance issues (e.g. goals, feedback, competence) (Tompkins
1998). Some of the challenges the warehouses are faced with are material handling, data
collection, increased labor to support the warehousing requirements (Garcia). The areas of
interest to measure the performance are productivity, inventory and order fulfillment. Some
organizations tend to measure their progress against financial measures such as return on
investment, cash flow, sales growth, but those measures are irrelevant and do not truly refer to the
issues of quality, service, and continuous improvement.