Abstract
We developan input-output model of a warehouse system to assess operationalefficiency. Our model simultaneously accounts for all of thecritical resources (labor, space, storage and handling equipment)and the different workload requirements (broken case, full caseand pallet picking, storage and order accumulation) of a warehouse.We collected extensive data on 57 warehouse and distributionfacilities from a variety of industries, including auto parts,dental and office supplies, electronics, fine papers, hardware,health care, industrial packaging, mail order apparel, officemachines, photographic supplies, and wholesale drugs, and usedthe model to assess and compare their efficiencies. We offer3 conclusions based on a statistical analysis of the operatingefficiencies obtained from several models: Smaller warehouses tend to be more efficient than larger warehouses.Warehouses using lower levels of automation tend to be moreefficient. This association is more pronounced in small firms.Unionization is not negatively associated with efficiencyand in fact may actually contribute to higher efficiency.
Similar content being viewed by others
References
Banker, R. D. (1993). “Maximum Likelihood, Consistency and Data Envelopment Analysis: A Statistical Foundation.” Management Science 39, 1265–1273.
Banker, R. D., A. Charnes and W. W. Cooper. (1984). “Models for Estimation of Technical and Scale Inefficiencies in Data Envelopment Analysis.” Management Science 30, 1078–1092.
Banker, R. D. and R. Morey. (1986). “Efficiency Analysis for Exogenously Fixed Inputs and Outputs.” Operations Research 34, 512–521.
Beardwood, J., J. H. Halton and J. Hammersley. (1959). “The Shortest Path Through Many Points.” Proceedings of the Cambridge Philosophical Society 55, 299–327.
Bouchnik, S., B. Golany, S. T. Hackman, U. Passy and D. Vlatsa. (2001). “Lower Bound Restrictions on Intensities in Data Envelopment Analysis.” Forthcoming in Journal of Productivity Analysis.
Camp, R. C. (1989). Benchmarking: the Search for Industry Best Practices that Lead to Superior Performance. Milwaukee: ASQC Quality Press.
Charnes, A., W. W. Cooper, A. Y. Lewin and L. M. Seiford. (1994). Data Envelopment Analysis: Theory, Methodology, and Application. Boston: Kluwer Academic Publishers.
Charnes, A., W. W. Cooper and E. Rhodes. (1978). “Measuring the Efficiency of Decision Making Units.” European Journal of Operations Research 2, 429–444.
Cohen, M. A., Y. S. Zheng and V. Agrawal. (1997). “Service Parts Logistics: A Benchmark Analysis.” IIE Transactions 29, 627–639.
Deprins, D., L. Simar and H. Tulkens. (1984). “Measuring Labor-Efficiency in Post Offices.” in The Performance of Public Enterprises: Concepts and Measurement. Amsterdam: North-Holland.
Fare, R., S. Grosskopf and C. A. K. Lovell. (1994a). Production Frontiers. Cambridge: Cambridge University Press.
Fare, R., S. Grosskopf, M. Norris and Z. Zhang. (1994b). “Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries.” American Economic Review 84, 66–83.
Frazelle, E. H. (1992). Material Handling Systems and Terminology. Atlanta: Lionheart Publishing.
Frazelle, E. H. (1996). World-Class Warehousing. Atlanta: Logistics Resources International, Inc.
Frazelle, E. H. and J. M. Apple, Jr. (1994). “Warehouse Operations.” in The Distribution Management Handbook. New York: McGraw-Hill, Inc.
Frazelle, E. H. and S. T. Hackman. (1993). “The Warehouse Performance Index: A Single-Point Metric for Benchmarking Warehouse Performance.” Material Handling Research Center Technical Report TR-93-14, Georgia Institute of Technology, Atlanta, GA.
Fried, H. O., C. A. K. Lovell and S. S. Schmidt. (1993). The Measurement of Productive Efficiency: Techniques and Applications. New York: Oxford University Press.
Golany, B. and S. Thore. (1997). “Restricted best practice selection in DEA: An overview with a case study evaluating the socio-economic performance of nations.” Annals of Operations Research 73, 117-140.
Kleinbaum, D. G. (1988). Applied Regression Analysis and Other Multivariable Methods, 2nd Ed. Boston: PWS-Kent Pub. Co.
Ray, S. C. (1991). “Resource-Use Efficiency in Public Schools: A Study of Connecticut Data.” Management Science 37, 1620–1628.
Schefczyk, M. (1993). “Industrial Benchmarking: A Case-Study of Performance Analysis Techniques.” International Journal of Production Economics 32, 1–11.
Sexton, T. R., S. Sleeper and R. E. Taggart, Jr. (1994). “Improving Pupil Transportation in North Carolina.” Interfaces 24, 87–103.
The Warehouse Management Book. (1988). J. A. Tompkins and J. D. Smith (eds.), New York: McGraw-Hill, Inc.
The Distribution Management Book. (1994). In J. A. Tompkins and D. Harmelink (eds.), New York: McGraw-Hill, Inc.
Tompkins, J. A., J. A. White, Y. A. Bozer, J. M. A. Tanchoco and J. Trevino. (1996). Facilities Planning, 2nd Ed. New York: John Wiley & Sons, Inc.
Tulkens, H. (1993). “On FDH Efficiency Analysis: Some Methodological Issues and Applications to Retail Banking, Courts and Urban Transit.” Journal of Productivity Analysis 4, 183–210.
Vlatsa, D. A. (1995). Data Envelopment Analysis with Intensity Restriction. Ph.D. Thesis, School of Industrial and Systems Engineering, Georgia Institute of Technology.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Hackman, S.T., Frazelle, E.H., Griffin, P.M. et al. Benchmarking Warehousing and Distribution Operations: An Input-Output Approach. Journal of Productivity Analysis 16, 79–100 (2001). https://doi.org/10.1023/A:1011155320454
Issue Date:
DOI: https://doi.org/10.1023/A:1011155320454