Warehouse Performance Measurement: Structural Equation Modeling Technique and PEST Analysis

Abstract

This research aims to propose a new model for warehouse performance measurement by overcoming the limitations of the traditional technique called productivity ratio. The proposed model is built up from 215 warehouses with Structural Equation Modeling (SEM) technique. This research focuses on exploring the relationships among four warehouse performance indicators. The indicators are classified and grouped according to the dimensions of time, cost, productivity and quality. In order to maintain consistency among metrics from different warehouse areas, a standard warehouse is defined according to layout, activities and indicators measurement units. Finally, the proposed model can help manufacturing firms to know the firm warehouse performance. This research also analyzes the effects of external factors on warehouse performance.
Political, economic, social, and technological factors, called PEST, are used as an analytical framework. After that the PEST analysis is applied with the proposed model the results found that the technological factor has the highest impact on warehouse performance. The economic factors are the next level of impact assessment. The last two factors are social and political issue, could be the least significant.