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

Alessandro Chiaraviglio, Sabrina Grimaldi, Giovanni Zenezini () and Carlo Rafele
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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

Logistics, 2025, vol. 9, issue 1, 1-22

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.

Keywords: OEE; warehouse performance; KPIs; performance measurement (search for similar items in EconPapers)
JEL-codes: L8 L80 L81 L86 L87 L9 L90 L91 L92 L93 L98 L99 M1 M10 M11 M16 M19 R4 R40 R41 R49 (search for similar items in EconPapers)
Date: 2025
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