Complex KPIs versus the usual benchmarks : a case study on Svensk Dos order picking department

Abstract: This thesis addresses the research gap of a limited discussion on how to establish targets and expectations for Key Performance Indicators (KPIs) related to order processing in warehouse settings. It emphasizes the scarcity of studies addressing this problem and the challenges faced by larger companies in monitoring their order processing performance without clear benchmarks. Svensk Dos, a major pharmacy in Scandinavia, faces challenges in accurately measuring productivity at its medication roll packaging station. The current Key Performance Indicator (KPI) of 100 packed rolls per hour/operator may not be equitable and accurate due to external variables affecting performance, such as roll type and quantity per box. This raises concerns about the KPI's effectiveness in measuring productivity. Hence, this study develops complex KPIs based on cycle time per packed product and investigates the KPI’s impact on productivity and management. Data collection involves performance observations for a regression model that make up the complex KPI and qualitative interviews for understanding the use and application of the complex KPIs for Svensk Dos. The study contributes to warehouse KPI literature and provides recommendations for accurate productivity measurement in medication roll packaging stations. In conclusion, KPIs proved themselves to be great for staffing the order handling station in the case study. The use of complex KPIs is better than the use of simple averaging.