To effectively and efficiently manage a warehouse, you need to use warehousing KPIs. Below is a listing of commonly used warehousing KPIs.
KPI is an acronym for key performance indicators (or key process indicators). A key performance indicator (KPI) is a metric that you have chosen that will give an indication of your performance and can be used as a driver for continuous improvement.
Selecting Warehousing KPIs
Every warehouse is different with different goals and objectives, so choosing just the right warehousing KPIs is tough. Generally speaking, measure the things that you can’t afford to go wrong.
Also, select just a few critical KPIs rather than a dozen. Better to really understand the measurements and drivers than spend your week calculating every KPI under the sun.
Ideally, the KPIs chosen will align to the most important deliverables in your warehouse.
Types of Warehousing KPIs
Below, some of the commonly used KPIs are listed under the following KPIs types: inventory, product availability, item fill rate, product damage, warehouse processing time, order entry, order documentation accuracy and transportation.
- Inventory Turnover
- Inventory accuracy
- Inventory to Sales Ratio
- Carrying Cost of Inventory
- Product Availability
- Stock-out percentage
- Percentage of orders filled complete
- Order fill rate & weighted average fill rate
- Average percentage of items on back order
- Item Fill Rate
- Percentage of order items that the picking operations actually fills within a given period of time
- Product Damage
- Number of returns to total orders
- Value of returns to total sales
- Rate of Return (reason for return)
- Production / Warehousing Processing Times
- Min, max, average time to process orders
- Order Entry
- Min, max, average time for order handling
- Percentage of orders handled within target time
- Perfect Order Rate
- Back Order Rate
- Order Documentation Accuracy
- Percentage of order documents with errors
- Percentage of deliveries on time
- Percentage of orders delivered by customer request date
- Damage and loss claims
- Order tracking
For additional information on warehousing KPIs, check out Klipfolio.
What warehousing KPIs do you recommend?