Warehouse Management KPIs Worth Tracking
There is no shortage of key performance indicators, or KPIs, that businesses can measure to get an overall view of operations. However, there are a few KPIs that supply chain managers should zero in on if they want to improve warehouse management. Here is a look at the top metrics that deserve your attention.
Storage KPIs are among the simplest of all to deal with, so they make for a great starting point. Monitoring the carrying cost of inventory, inventory turnover, and average inventory values are all worth the effort. Inventory turnover is the cost of the total goods that were sold during a particular period divided by the average inventory value. To determine the carrying cost of inventory, you need to measure how long the product stays in the warehouse (the inventory carrying rate) and multiply it by the average inventory value.
These KPIs are concerned with the total number of items that were shipped compared to the projected figures. If you shipped 200 items and 275 were scheduled to ship, there will be a deficit KPI, which indicates potential delays or issues in the warehouse. You can calculate it by dividing the total number of orders that shipped by the number of your planned shipments; the ideal value for this is one. Higher numbers point to increased operations, while lower ones indicate decreased productivity.
It’s important to keep track of equipment to ensure proper maintenance. By dividing the current time a piece of equipment is used since the last maintenance by the average time that passes between maintenance, you can determine how long your exiting equipment will work before more maintenance is needed. Averaging your equipment KPIs together can show your overall predicted equipment uptime.
Some other areas where KPIs should be measured include reverse logistics, picking and packing, and receiving and put-away.
This blog post was based off of an article from Cerasis. View the original here.