Warehouse management always faces many challenges: Customers need to get the products they order with quality service. Employees deserve a healthy and non-boring working environment. Suppliers need to have access to inbound freight routing information immediately. Facing these challenges all at once can be overwhelming, but Warehouse Managers can simplify processes by tracking the following top KPIs:
1/ Receiving and Put-Away KPIs
- Workforce Utilization
- Volume per employee
- Cost per item
- Accuracy and timeliness of delivery
- Labor costs
- Backorder rate
Managers must track the cost of each order item, the accuracy and timeliness of inbound shipping, and the labor costs associated with receiving the goods. These KPIs can be leveraged to improve supplier relationships and increase employee productivity.
2/ Storage KPIs
You need to keep track of your inventory turnover, inventory costs, and average inventory value when managing a warehouse. The 2 most important storage KPIs are calculated from the following formulas:
- Inventory Turnover = The Cost of Total Goods Sold During a Period / Average Inventory Value
A high inventory turnover is a good sign for your warehouse. These KPIs allow you to assess and control purchasing and product demand, and forecast demand to keep your inventory at optimal levels.
- Carrying Cost of Inventory = Inventory Carrying Rate (How Long a Product Stays in the Warehouse) * Average Inventory Value
3/ Picking and Packing KPIs
- Average number of items picked per employee
- The total value of picks
- Cost per line item
- Labor costs
- Cost of packaging
- Order cycle time
4/ Shipping KPIs
These KPIs may seem similar to the aforementioned picking and packing KPIs, however, these metrics will focus more on the total quantity of goods shipped than on the number of items expected to be shipped. For example, the company delivered 100 products but 150 products had to be shipped on schedule, so you didn’t meet your Shipping KPIs, indicating delays or warehouse operations issues.
Shipping KPIs = Total Orders Shipped / Number of Planned Orders.
An ideal result is equal to 1. An increasing result means the operation is getting more efficient, and conversely, a decreasing result indicates a decrease in productivity.
5/ Reverse Logistics KPIs
Reverse Logistics KPIs are indicators that revolve around products that are recycled or need to be returned from the consumer back to the business. There are many indicators of reverse logistics, but the most important is the return rate
6/ Inventory Accuracy
7/ Equipment KPIs – KPIs về thiết bị
8/ The Big Picture
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Quote from electronic information source: “Indispensable KPIs in Warehouse Management”, See at: https://vilas.edu.vn/nhung-kpis-khong-the-thieu-trong-quan-ly-nha-kho.html