Survival of the fittest: the impact of fit between warehouse management structure and warehouse context on warehouse performance

Abstract

Warehouse operations are vital for the success of a supply chain. This paper explores fit among warehouse management structure and the context in which the warehouse operates as an important driver of warehouse performance. Warehouse management structure has been operationalised as the extensiveness by which warehouse operations are planned and controlled, and the complexity of the decision rules used for optimisation of the operations. Warehouse performance is measured using data envelopment analysis (DEA). Hypotheses are developed and tested in a survey study among 111 distribution warehouses in the Netherlands and Belgium. Our results show that indeed warehouse management structure should be adapted to context. In order to obtain high warehouse performance more complex warehouse tasks require more and more complex decision rules, and warehouses with more unpredictable demand require fewer tactical plans. These results can help warehouse managers to structure their warehouse management contingent on the context in which the warehouse operates.