Careers Business Ownership Measures of Warehouse Productivity Share PINTEREST Email Print Alistair Berg / Digital Vision / Getty Images Business Ownership Operations & Success Supply Chain Management Sustainable Businesses Operations & Technology Marketing Market Research Business Law & Taxes Business Insurance Business Finance Accounting Industries Becoming an Owner By Martin Murray Martin Murray Twitter Martin Murray is a former writer for The Balance Small Business, and the author of eight books on supply chain management and enterprise resource planning. Learn about our Editorial Process Updated on 12/04/19 Warehouse productivity is a number of measurements that management will analyze to monitor the performance of their warehouse operations. The basis of many of the measures used in warehouse productivity is based on how much it costs to perform an operation. The study of labor productivity started with the analysis of repetitive operations in a manufacturing environment. Time and motion studies were performed by industrial engineers, who would observe how long line operators took to do certain operations and would then mathematically calculate standard times for operations. The warehouse operations are unlike production as they are not repetitive, but a number of measures have been devised to help measure warehouse productivity. Benefits of Labor Measurement The warehouse operation is not the same as a production line and warehouse staff does not perform the same repetitive tasks each shift. However, they do perform a number of similar tasks over a period of time. To measure the warehouse productivity, the management must apply standard measurements that can be used for operations that occur in the warehouse, for example, perform physical inventory or place goods in the picking area. However, in the warehouse, there is any number of factors that can change the time taken to perform a task. The use of enterprise resource planning (ERP) systems can easily calculate the length of time an operation can take to perform, but a standard measurement must be calculated using a sampling method or time study. Only after the standard measurements are agreed upon can the benefits of any labor measurement can be enjoyed. The major benefit of warehouse management is that standards can help when any changes are to be made to warehouse layout changes, loading, or shipping dock changes, and staff reduction. The standard labor measurement combined with the number of operations performed in the warehouse on any shift or series of shifts can result in an accurate picture of the performance of the warehouse. Issues With Labor Measurement There are a number of issues with the use of labor measurement that can bring into question the validity of any analysis of warehouse performance. The standards for labor measurement can change over a period of time. Technological changes, including the warehouse software and hardware, can change standards and therefore the analysis becomes void. The type, size, and variety of materials moved in the warehouse may change over time, which could increase or decrease standard measurements. In addition, changes to the warehouse layout or process changes could drastically change the standard measurements. It is important to remember that standard labor measurement does fluctuate and if warehouse decisions are based on these measurements, they should be as current as possible and based on the current warehouse operations. Pre-Engineered Standards The pre-engineered standards take a normal warehouse operation and reduce it to a number of smaller elements which, when combined together, make up the complete operation. The elements include all the actual operation components, plus travel, rest, and other necessary items will be based on the average warehouse operator. The time values that make up an operation are based on time measurements that reduce all motion operations down to a time measurement unit (TMU). A single TMU is equivalent to 0.00001 hours. These TMUs have been developed since the 1940s for each movement an operator would make. The Department of Defense (DoD) published a handbook back in 1967 that described the basics for TMUs called Materials Handling Standard Time Data. It is possible to use the TMUs to calculate the length of time required for any operation. Summary In measuring warehouse productivity, warehouse management does have a number of options to calculate the performance based on sampling, standard operations, or time studies. Although all these options have benefits and issues, the measurement should be taken as a guide and performance measured against that guide. In this way, the performance of the warehouse can be fairly judged.