Benchmarking warehousing and distribution operations: An input-output approach

We develop an input-output model of a warehouse system to assess operationa l efficiency. Our model simultaneously accounts for all of the critical res ources (labor, space, storage and handling equipment) and the different wor kload requirements (broken case, full case and pallet picking, storage and order accumulation) of a warehouse. We collected extensive data on 57 wareh ouse and distribution facilities from a variety of industries, including au to parts, dental and office supplies, electronics, fine papers, hardware, h ealth care, industrial packaging, mail order apparel, office machines, phot ographic supplies, and wholesale drugs, and used the model to assess and co mpare their efficiencies. We offer 3 conclusions based on a statistical analysis of the operating eff iciencies obtained from several models: Smaller warehouses tend to be more efficient than larger warehouses. Warehouses using lower levels of automation tend to be more efficient. This association is more pronounced in small firms. Unionization is not negatively associated with efficiency and in fact may a ctually contribute to higher efficiency.