What do squid and pig have to do with a lean warehouse operation? … hint: metrics and measures

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What measures you should focus on to drive the actions and outcomes you want.

Pig and Tape for lean measure metric blog imageDoes your warehouse team behave exactly as they should? Most likely not, but you can change it. Measures drive behavior, and behavior is at the core of what you need to change. You have heard the adage “you get what you measure” right. As operations managers, what are the key measures that you need to focus on to keep the lean journey moving?

by John Fleckenstein

Really any operation should follow the SQDPG (pronounced “Squid Pig”) metrics. This goes back to my previous post on theedgeinbev.wordpress.com. SQDPG metrics are Safety, Quality, Delivery, Productivity, and Growth. I don’t completely agree with Growth as an operations measure, but the other four are completely relevant.

Safety is defined pretty easily: no injuries, which can be measured as LTI (Lost Time Injury) or LTS (Lost Time Severity). A Lean Manager may even want to track hazardous conditions located, and reward as appropriate. This encourages CI in this metric, and works towards prevention. I suggest conducting a random sample each night to observe a different operator to locate hazards that way. I have seen operations where the operations manager hides something in a particular part of a fork truck to see if the operator is really doing a proper inspection.

Delivery (or Service) is completing the order when the customer wants it. Thus far, I have not seen this measured in the beverage world, but it probably should be. My recommendation is to have cut times for each delivery route or shipment route, and measure the actual completion time of each. Some sort of heijunka (smoothing flow) is a good way to track this too. By measuring the variation fulfillment you could track the flow with the goal of better sequence and standardization. Using takt time (cycle time) to set your delivery time target is a reasonable approach.

Quality is completing the order how the customer wants it, meaning right quantity and right condition. This is something that I have commonly seen this measured in warehousing, sometimes referred to as the “perfect order”. http://www.supplychainmetric.com/perfect.htm

Productivity is the measure of units/hour versus a target, hopefully measured against a target cycle time. In a Lean warehouse, there may be some stratification to separate obviously different processes. For example, picking full and picking single cases have different cases/hour targets, based on significantly different cycle times. Also, most operations measure this overall for the shift. While this is helpful, it does nothing to identify when the variation is happening.

Now to your next question, how to measure these metrics? In the daily operation, I strongly recommend using a visual monitor or whiteboard type of approach. The supervisor needs to stay close to tracking this, so they can react to a problem as close to a cycle as possible. Most sites agree that tracking at least hourly works best.

For CI purposes, some sort electronic tracking is needed as well, so that sufficient sample sizes are obtained. The trick to all of this is to design it in such a way that the supervisor can easily maintain and sustain this information. Fortunately, there are enough “tricks of the trade” out there; something reasonable can usually be developed quickly and easily.

Hopefully the SQDPG approach will allow you to start tracking warehouse measures and propel you down the lean warehouse path. Remember it is the measures that drive the behavior so spend some effort to get those in place and check that they are producing the correct behaviors.


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