Performance Indicators for Warehouse Operations

In 2002 Champions League final, Zinedine Zidane scored a goal from a beautiful left footed volley against Bayer Leverkusen - a moment that still lives in heart of any football fan. No one could have thought at that time that the fame of midfielder turned coach would surpass further and he will lead Real Madrid to multiple Champions League Titles. Do midfielders make better coaches?

A midfielder, often considered the engine of the team, connects offense and defense plays. The ability to comprehend a game from a central position make Midfielders like Zidane or Pep Guardiola one of the most successful football managers. Even beyond football, the ability of a wicket keeper like Dhoni to witness the action on the field from behind the stumps provides him a deep tactical perspective of the game.

When Addverb worked on the design of Warehouse Execution System, we used the same perspective to settle the debate between global and local warehouse optimization. It is guided by the realization that elevating one's view about the plane of occurrence helps in assessing things strategically and tactically rather than falling into the trap of local optima.

Global optimization treats warehouse as a single entity and aims to focus on optimizing the net output whereas local optimization looks only at the process level KPIs.

The fallacy of Local Optimisation

Imagine a factory where production line is hits its target volume every day, the maintenance team is reporting minimal downtime, and the inventory levels are perfectly balanced. However, while individual departments are meeting their KPIs, the factory is struggling to meet its overall performance. Tracking the locally optimised KPIs not only provides a false sense of achievement but also keeps the problem of not meeting the overall performance under wraps.

Here are some examples of locally optimized KPIs that do not result in global benefits:

Production Line Efficiency: The production line might be running at maximum efficiency, but if the products are not being shipped out on time due to bottlenecks in the logistics department, the overall performance suffers.

Maintenance Downtime: The maintenance team might report minimal downtime, but if the machines are not being utilized effectively due to poor scheduling, the factory's output remains low.

Inventory Levels: The inventory team might maintain perfect stock levels, but if the raw materials are not being used efficiently, it leads to wastage and increased costs.

Evolution from Supply Chain to Supply Network:

Supply chain management aims to ensure products reach customers in the right quantity, condition, and time while maintaining quality and cost control. Traditionally, a central planner manages costs and demand to develop optimal solutions. However, modern supply chains have evolved into supply networks, where multiple independent decision-makers interact.

The real-world businesses rely on interconnected suppliers, each with its own priorities and constraints. The supply network approach improves efficiency by modeling interdependencies, identifying bottlenecks, and enabling digital optimization. Unlike traditional supply chains, supply networks recognize conflicting objectives and information asymmetry among participants. The focus shifts towards collaborative trade-offs that enhance overall logistics performance.

Global Optimization of warehouse in a Supply Network

In context of a Supply Network, A warehouse execution system looking for global optimization must look at the entire warehouse as a single entity. This approach aims to maximize overall efficiency by coordinating all activities and resources. Equally important is the system's ability to understand and relate the individual facets of the warehouse - so as to know where the optimization levers exist. For example, a global optimization strategy might involve synchronizing inbound and outbound processes to minimize wait times and reduce bottlenecks. This holistic view ensures that all parts of the warehouse work together seamlessly, much like a well-coordinated sports team.

Finding the Right Balance

The key to success in both sports and warehouse management is finding the right balance between individual and team performance. In a warehouse, this means integrating location-specific optimizations into a broader global strategy. By doing so, warehouses can achieve both localized improvements and overall efficiency.

How Addverb's software suite helps achieve global optimization?

Integration and Coordination: Addverb's software suite, including the Optimus Warehouse Management System (WMS), Concinity WES, and Movect Fleet Management System (FMS), provides end-to-end management of all services with one suite of solutions. This ensures seamless integration and coordination across different systems.

Software like the Concinity, our Warehouse Execution System (WES) is designed to efficiently manage and coordinate the flow of materials and information across diverse automation systems. It offers advanced process optimization capabilities to streamline warehouse operations.

For instance - by wearing the hat of the factory head - Concinity tries to optimize global metrices like turnaround times and storage utilization rather than focusing on local optimization metrices like lift/shuttle throughputs.

This strategy is even used to effectively drive system throughput rather than focusing on maximize different zonal throughputs when it comes to each picking.

Task Management: The software adapts priority-driven scheduling to align with specific operational needs, ensuring optimized task allocation and resource utilization. This helps in maximizing overall throughput and productivity.

For example, Movect FMS optimizes the allocation of tasks to robots, maximizing overall throughput and efficiency

Seamless Integration: Concinity seamlessly integrates with existing operations, significantly enhancing productivity. Its plug-and-play design allows for easy integration with other systems, ensuring that all parts of the warehouse work together seamlessly. Because of extensive product range across various automation systems, Addverb owing to the ubiquitous nature of its own control systems - knows what is needed to efficiently integrate multiple interdependent systems. Cases in point are the way we have integrated with other carton erecting control systems/A-frames in a few of our solutions.

Real-Time Updates on operational metrices: Software provides near real-time updates on warehouse activities, helping in identifying bottlenecks and ensuring smooth operations. This is crucial for maintaining overall efficiency and avoiding delays. For example, Movect, our Fleet management system, constantly updates on the expected throughput of a system.

As part of the solution understanding - the software deliverables include the list of operational dashboards that answer all the questions of an operational mind, and this greatly helps in pre-emptively highlighting the trouble areas, thereby helping you reach your operational goals.

Author Bio :

As Deputy General Manager of Software at Addverb, Bharanidharan Sekar is at the forefront of driving innovation in warehouse operations software. With a deep expertise in descriptive, diagnostic, predictive, and prescriptive analytics, he plays a pivotal role in advancing analytics maturity across manufacturing sites. At Addverb, Bharanidharan leverages cutting-edge technology to optimize operations, and enable intelligent automation in supply chain environments, ensuring businesses stay ahead in an increasingly data-driven world.

COMTEX_464317045/2891/2025-04-07T14:07:06

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