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Defining KPIs in the warehousing business according to ISO 14001

With the growth of internet selling in the last decade, there has never been a time where the warehousing and fulfillment sector has been bigger and busier. With this upturn comes the likelihood of an increased environmental impact in this sector as more resources, raw materials, and transport are employed to service this growing need. Therefore, as demand increases, it usually stands to reason that the impact on the environment, both local and global, will also increase. It is, however, possible for organizations who either become certified according to ISO 14001:2015, or at least adopt the principles of the standard, to be able to mitigate that risk through actions and lessen its environmental impact accordingly. As ever, improving this performance begins with accurate definition of the KPIs (key performance indicators) that are important to an organization’s environmental performance, and awareness of activities that may provide environmental risk. So, how does an organization in the warehouse and fulfillment business begin to define these KPIs to ensure that this process has the desired foundation?

Identifying KPIs for your business – Why?

Any business with an EMS (Environmental Management System) certified against ISO 14001:2015 can attest to the fact that one of the fundamental building blocks of the standard is identifying environmental aspects that may potentially be damaging to your business and the interested parties, and deciding how to define and measure them. This provides the foundation to decide on initiatives, programs, and processes to mitigate and improve these aspects, and therefore the organization’s environmental performance. You can learn more about environmental aspect criteria in the article ISO 14001:2015 – How to set the criteria for environmental aspects evaluation. So, given that we now understand the importance of defining KPIs for any business, and the direct relationship between environmental aspects, an organization`s environmental impact, and action plans with the mitigation measures and the respective KPIs, how do we apply this in the warehousing and fulfillment business?

Defining KPIs in the warehouse and fulfillment sector

Most organizations certified against ISO 14001:2015 will realize the importance of managing their supply chain towards environmental excellence, a topic we looked at in the article Driving your supply chain to ISO 14001 compliance. Ensuring your supply chain is ISO 14001 certified wherever possible can help greatly with this, and where this is not possible you will find that ensuring you use environmental criteria when selecting suppliers can have a hugely positive impact on your supply chain’s effect on the environment. Along with this, there are several other major considerations when defining KPIs related to the evaluated environmental impacts in this industry:

  • Packaging: Huge amounts of packaging are consumed annually in the warehouse and fulfillment sector – think of the major online retailers who deliver packages to many of our households regularly. Consider the source, lifecycle, and recyclability of packaging and consider giving customers options whereby you can consolidate orders and reduce packaging used. Consider signage on your packaging to ensure that your customers recycle, too. Similarly, with any internal packing or impact-absorbing material, recycled material can almost always be sourced for this job.
  • Utilities: Modern warehouses can be massive, and vast amounts of heating and lighting can be used during storage and operations. Consider ECO-friendly LEDs and movement sensors to limit unnecessary electrical consumption. Design your warehouse layout intelligently, ensure your commonly used items are together and rarely used items likewise, and you can limit the electricity used in both areas. Again, consider the impact of using unnecessary energy providing unneeded heating in winter and you can limit your warehouse’s environmental impact.
  • Carriage: Again, a huge aspect of the warehousing and fulfillment sector is the carriage of goods. Ensure your goods are consolidated into shipments to common regions, and that when your organization selects a carrier they can demonstrate a record of initiatives to ensure that their own activities are organized with minimum environmental impact, as the focal point of their thinking.
  • Internal programs: Don’t forget that your own employees and office activities can also have a significant environmental impact that also needs to be considered. In our previous article How to identify environmental aspects in your office using ISO 14001, we considered how the choices employees make daily, from sharing travel to work to when to use printers and consumables and so on, can have a huge impact on the environment. Ensure that your organization considers this, and provides the correct information, competence, and knowledge to allow your staff to make intelligent and informed decisions.

KPIs are defined, what now?

As suggested above, defining your KPIs is the foundation for good performance in your EMS, but you must know how to design initiatives and programs to combat these activities that put your environmental performance at risk. What is clear is that you can identify and define your KPIs more accurately, and what is better, you should be able to work towards mitigation of your effect on the environment in your warehouse and fulfillment business. This is the time when your organization can now employ the “Plan, Do, Check, Act” cycle to ensure your action is considered and ultimately effective. Ensuring that you consider these elements can be key to making sure your warehousing and fulfillment business’s impact on the environment is as kind as possible.

Why not use our free online training  ISO 14001 Foundations course to improve your knowledge about the environmental KPIs?

Advisera John Nolan
John Nolan
John Nolan is a Fellow of the Institute of Leaders and Managers in the United Kingdom, and Prince 2 accredited with a background in Engineering and Electronics and Data Storage and Transfer. Having studied and qualified as both a Mechanical and Electronic Engineer, he has spent the last 15 years designing and delivering Quality Systems and projects across many sectors in the UK, including both national and local government.