An Integrated Approach to Evaluating and Improving Efficiency of Warehouse Performance: Application to Consumer Electronics Industry

Wang Yiting

Abstract

This project aims to design a complete approach that is easy to understand and simple to use, in the evaluation and improvement of warehouse performance efficiency for companies that have more than one warehouses to manage. Decision making process becomes complicated when involving multiply criteria at multiple stages together with budget constraint. This paper designs an integrated methodology to simplify this complicated situation as to assist the warehouse managers in performance efficiency improvement.

The individual methodology components used in this paper; namely, Data Envelopment Analysis (DEA), Quality Function Deployment (QFD), Analytic Hierarchy Process (AHP) and Cost-effectiveness Analysis, have been well-established in their own individual fields. However, there is a lack of published papers regarding the integration of all these methodologies mentioned above in the application of warehouse performance efficiency improvement. An innovative integrated approach is proposed to assist the warehouse managers in the warehouse management regarding the issue of efficiency improvement. The complete process involves identifying the inefficient warehouses using DEA, proposing solutions targeting at the warehouse identified using QFD, evaluating the effectiveness of the solutions using AHP, cost considerations for the decision making and re-measuring the efficiency scores for continuous improvement. This integrated approach develops a complete process from analyzing problems to solving problems and continuous improvement in the field of warehouse science.

This is a new integration of methodologies which adds values to the academic research in the area of the individual current methodologies. It is also a more complete efficiency problem evaluation and improving tool as compared with other existing warehouse management tools, as it does not stop at measuring the efficiency but continuous with problem solving for efficiency improvement.