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How Measuring Warehouse KPIs Can Help Increase Revenue

8 November 2021, 11:56 am
warehouse kpi

The speed of commerce and skyrocketing customer demand have placed tremendous pressure on supply chains. While warehouse operators need to provide speedy delivery, they also have to ensure that operational accuracy is not compromised and costs are kept in control. Thanks to a bevy of digital tools, including modern warehouse management systems, it’s now easier for warehouse management to keep track of their processes and inventory more efficiently and accurately with real-time data.

But having data is not enough. Warehouse operators need to know the right metrics to look into and the right data to track in order to capture warehouse trends, uncover problem areas and maintain that fine balance between cost, performance and customer satisfaction.

Our recent white paper titled: What Are You Measuring In Your Warehouse looks at the relevant KPIs warehouse operators can track to run an efficient warehouse today. From customer satisfaction to supplier KPIs, to monitoring throughput, inventory accuracy and order fulfillment stats, tracking these metrics can give your warehouse operations a boost in the right direction.

Here are just some areas where measuring warehouse KPIs will help you improve your bottom line:

Improve Inventory Accuracy

Accurate inventory management is key to ensuring proper pick/pack operations and timely order fulfillment. Inventory accuracy is the measure of the variance between system stock and physical stock on hand. The typical and acceptable accuracy levels are between 94-98% for manual systems and averaging over 99.5% with real-time technology and processes, and best in class is 100%.

Increase Labor Utilization

Solid employee productivity is vital to warehouse efficiency and profitability. Measuring and monitoring labor performance is the first step to improving processes and therefore efficiency. Picks per hour is a good example for managing the efficiency of your outbound team.

Maximize Warehouse Capacity

As supply chain demands increase, many companies have been running out of warehouse space. Do you need more warehouse space, or can you use the space you have more effectively? Storage utilization is a metric that measures the average space occupied in terms of square meters/feet or pallet positions versus the actual storage capacity on the floor. This also includes measuring and ensuring that the stock is optimized in the bins, as otherwise the warehouse could be losing storage space and revenue.

Customer Satisfaction

This is one of the most important statistics, because if your customers are not happy, then they probably won’t be your customers for much longer. Order accuracy and On Time In Full (OTIF) rates are key. Typical on-time shipments should average between 98-99% and best-in-class operations target order accuracy between 99.5% and 99.9%.

To learn more about which metrics are most important to your operations to increase warehouse productivity, capacity and profitability, download the white paper: What Are You Measuring In Your Warehouse by Made4net.