How to Measure Warehouse Efficiency:

Detailed KPIs to Watch

measuring warehouse efficiency through detailed kpi analysis

For businesses with growing pains, it can feel as if everything is fast and loose. The product is moving, the company is, making money – what could possibly go wrong?

A big problem with growing companies is the fake-it-’til-you-make-it mentality that aims to stave off failure without ever preparing for real growth.

Getting a grip and putting down roots with warehouse management procedures and key performance measurements allows companies to focus on growing – not having to go back and fix things.

Winging it, however successfully, is not a substitute for prudent benchmarks and planning.

Anyone can plan for and achieve failure. Planning for success that doesn’t outstrip ability is another thing altogether.

Planning for success and building a supply chain infrastructure can begin with as little as ten SKUs in a garage warehouse.

If a business starts early with planning, then there’s much less to be done – just growing into it.

KPI Stacks

Warehouse performance metrics are often called KPIs – Key Performance Indicators.

Getting these KPI in place and actively monitoring the data will control costs and reduce order fulfillment issues down the road. There are three stacks that you need to look at in warehouse operations management – inbound, internal, and outbound.

Inbound KPIs

  • Order Cost vs Value
  • Deliveries on Time
  • Accurate Packing Slips
  • Order Turnaround
  • Order Refill Rate
  • Returns Issues
  • Technology
  • Customer Service

Internal KPIs

  • Inventory Accuracy
  • Pick Rate Productivity
  • Fill Rate
  • Cost of Service
  • Outbound Order Turnaround
  • Cycle Time
  • Staff/Equipment Utilization
  • Pack and Ship Accuracy

Outbound KPIs

  • Profitable Orders
  • Sales Volume/Order Frequency
  • Order Cycles
  • Credit/Payment Issues
  • Business Viability
  • Orders Refunded
  • Breakage/Return Rate

As you can see a number of the items in one stack have a bearing on the entries in the other two stacks, and ultimate on your customer satisfaction rating.

KPIs are not just individual numbers, but a way to define overall performance when taken and measured week-to-week, month-to-month, and year-to-year. Keeping on top of these numbers will let warehouse and distribution center managers know the health of the business beyond the cash flow.

Spotting issues early-on can prevent them from becoming entrenched and grow into huge, snarling problems.

Get on Top of Inventory

Getting on top of warehouse efficiency metrics is very important and inventory cost issues can sap an outwardly healthy business. Receiving, put away, inventory-taking, order picking, and order cycles need to be considered as a continuous improvement process, not as separate issues without impact on other metrics. Shaking up putaway and picking methods with a Pick-to-Light process can be a big part of getting inventory in order and improving KPIs. Bringing in Voodoo Robotics’ Pick-to-Light is an economical and scalable alternative that is minimally disruptive. The versatile, battery-operated devices need no wiring for power and can be connected to the cloud or your own on-site server. See what Voodoo can do to boost your operational efficiency, and watch your performance metrics improve.

Get Started

Let’s have a conversation so we can better understand your needs.  Schedule a demo or contact us and boost your KPIs!

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