Tracking warehouse KPIs is one of the most significant aspects of warehouse management. Efficient management of your warehouses is a crucial step for all other processes to work efficiently. Moreover, it allows you to track the performance of various trends and measure how effectively they are operating, determine potential issues and handle risks.
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There are various ways to track the performance of a warehouse, such as examining and evaluating your business’s financial statements and conducting reviews. One of the best ways is to measure performance through KPIs (Key performance indicators). KPIs measure how effectively your processes are performing and whether they’re reaching their objectives. You can seek the help of a company that offers transloading and warehousing services. It can save you from the hassles of managing your warehouse.
In this blog, we will discuss the most vital warehouse management KPIs you must begin tracking right now for efficient warehouse management.
Inventory
Inventory refers to the goods placed in your warehouse. Inventory KPIs help you know the movement of your inventory.
1. Inventory accuracy
Inventory accuracy is the process of matching the level of inventory that is physically present in the warehouse with the amount of tracked inventory. You can track inventory with the help of a warehouse management system.
2. Shrinkage
Shrinkage refers to an excess level of inventory that is not available in the warehouse but recorded in the accounting. This KPI will help you determine the inventory level that is missing from the warehouse due to theft or damage.
3. Carrying cost of inventory
The carrying cost of inventory refers to the amount of money spent on carrying the stock of goods in the warehouse. Remove obsolete and slow-moving items to minimize the inventory carrying cost.
4. Inventory turnover
Inventory turnover refers to the rate at which your inventory is sold. A higher inventory turnover ratio means higher sales and vice versa.
5. Inventory to sales ratio
The inventory to sales ratio refers to the amount of inventory in store in relation to the sale that you’re making every month.
6. Receiving efficiency
Receiving efficiency refers to the volume of inventory received per hour worked. It’s measured by dividing the volume of inventory received by the number of man hours.
7. Cost of receiving per line
The cost of receiving per line refers to the expenses a warehouse spends on receiving a line of products from the vendors.
8. Receiving cycle time
Receiving cycle time refers to the average time consumed to process received goods.
Putaway
Putaway refers to placing the goods at the appropriate location and begins once the goods are received. These KPIs help you know whether the processes are performing efficiently or not.
9. Accuracy rate
The accuracy rate measures the percentage of items appropriately placed at their location. It is calculated by dividing the inventory put away correctly by the total inventory put away.
10. Putaway cost per line
This KPI calculates the expenses incurred on putting away a stock per line.
11. Putaway cycle time
It refers to the average time consumed to place a single item.
Order management
The order management process begins when the order is placed and finishes when the customer receives the order.
12. Picking accuracy
Picking accuracy calculates the accuracy with which the items are picked from the warehouse for fulfilling customer orders.
13. Total order cycle time
It refers to the average time taken for an order to be shipped. The process consists of all the activities undertaken to process an order. It starts as soon as the customer places an order.
14. Order lead time
It refers to the average time taken to fulfill a customer order.
15. Backorder rate
It refers to the percentage of backorders out of total orders.
16. Fulfillment accuracy rate
It calculates the number of orders fulfilled according to the customer’s demand out of the total number of orders.
17. On-time shipping rate
It measures the efficiency of your shipping processes.
18. Cost per order
This KPI calculates the expenses incurred on fulfilling one customer order.
19. Rate of returns
It calculates the rate at which customers return the goods once purchased.
Safety
Heavy types of equipment used in warehouses pose serious threats. So, it’s good to keep a tab on these accidents to prevent them.
20. Accidents per year
This KPI measures the number of accidents that have consumed time and money.
21. Time since the last accident
The KPI measures the time since the occurrence of the last accident.
Keeping an eye on the warehouse management KPIs can help you gauge the performance of your warehouse and help you improve certain areas. If you’re looking for the best transloading and warehousing services in Kent, DT lines is your one-stop destination. They provide the Best Transloading Services in Kent that will help you reduce bottlenecks and save time and money.
