Warehouse costs can be broken down to four basic parts, but each part has an impact on the whole operation. The largest single cost is, naturally, order picking. This takes up to fifty percent of warehouse resources. The other fifty percent is composed of shipping (15%), receiving (15%), and storage (20%). Looking at this, just having stock and picking it for an order eats 70 percent of an operation’s overall resources between items being received and shipped out. Let’s tackle KPIs for a basic warehouse operation.
- Cost per received packing slip line. This means the cost of the item plus the cost in time and resources.
- Lines (not orders) throughput per hour. Orders can vary in quantities and sizes.
- Utilization of staff and equipment per hour of each shift
- Quality, in this case, means the accuracy of the invoices received.
- Cycle time calculates how many orders can be processed per cycle.
- Cost to put away each line of received stock.
- Lines of items put away per hour.
- Utilization of staff per hour to put away.
- Quality of put away measured by accuracy with each item matched per SKU.
- Cycle time in the amount of time it takes to put away once line and start the next line.
Efficiency is more than a matter of speed, it is a matter of accuracy as well. The same light directed picking technology that can improve overall picking KPI can also be used in getting products from the loading dock to the shelves. A cart with the same display can tell a stocker what aisle, and which shelf or bin, or a stocker at large has only to look for the lighted display to know where to stock the item and indicate with the push of a button that the task is accomplished.