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Overall Warehouse Effectiveness (OWE): A New Integrated Performance Indicator for Warehouse Operations

Author

Listed:
  • Alessandro Chiaraviglio

    (Department of Management and Production Engineering, Politecnico di Torino, Corso Duca degli Abruzzi 24, 10129 Torino, Italy)

  • Sabrina Grimaldi

    (Department of Management and Production Engineering, Politecnico di Torino, Corso Duca degli Abruzzi 24, 10129 Torino, Italy)

  • Giovanni Zenezini

    (Department of Management and Production Engineering, Politecnico di Torino, Corso Duca degli Abruzzi 24, 10129 Torino, Italy)

  • Carlo Rafele

    (Department of Management and Production Engineering, Politecnico di Torino, Corso Duca degli Abruzzi 24, 10129 Torino, Italy)

Abstract

Background: Warehouses play a vital role in logistics systems, not only for storing goods but also for providing value-added services. To improve warehouse productivity and reduce costs, it is essential to measure their performance and identify inefficiencies. Method : This paper introduces a new aggregated key performance indicator (KPI), called Overall Warehouse Effectiveness (OWE), to evaluate the efficiency effectiveness of the physical structure of a warehouse. OWE utilizes the concepts of Availability, Performance and Quality, similar to the Overall Equipment Effectiveness (OEE) metric used in manufacturing. Results: The proposed indicator is then applied to a case study to demonstrate its use and provide theoretical and practical implications. Conclusions : In terms of theoretical implications, the proposed metric fills a gap in the literature by providing an aggregated indicator specifically designed for storage systems. For practitioners, OWE enables the identification of efficiency waste, customer service faults and adequacy of inventory management policies.

Suggested Citation

  • Alessandro Chiaraviglio & Sabrina Grimaldi & Giovanni Zenezini & Carlo Rafele, 2025. "Overall Warehouse Effectiveness (OWE): A New Integrated Performance Indicator for Warehouse Operations," Logistics, MDPI, vol. 9(1), pages 1-22, January.
    • Handle: RePEc:gam:jlogis:v:9:y:2025:i:1:p:7-:d:1562590
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    References listed on IDEAS

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    1. Tritos Laosirihongthong & Dotun Adebanjo & Premaratne Samaranayake & Nachiappan Subramanian & Sakun Boon-itt, 2018. "Prioritizing warehouse performance measures in contemporary supply chains," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 67(9), pages 1703-1726, November.
    2. Gu, Jinxiang & Goetschalckx, Marc & McGinnis, Leon F., 2010. "Research on warehouse design and performance evaluation: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 203(3), pages 539-549, June.
    3. de Koster, Rene & Le-Duc, Tho & Roodbergen, Kees Jan, 2007. "Design and control of warehouse order picking: A literature review," European Journal of Operational Research, Elsevier, vol. 182(2), pages 481-501, October.
    4. Muñoz-Villamizar, Andrés & Santos, Javier & Montoya-Torres, Jairo R. & Jaca, Carmen, 2018. "Using OEE to evaluate the effectiveness of urban freight transportation systems: A case study," International Journal of Production Economics, Elsevier, vol. 197(C), pages 232-242.
    5. Steven Hackman & Edward Frazelle & Paul Griffin & Susan Griffin & Dimitra Vlasta, 2001. "Benchmarking Warehousing and Distribution Operations: An Input-Output Approach," Journal of Productivity Analysis, Springer, vol. 16(1), pages 79-100, July.
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