A warehouse is a world of its own, loaded with complex tasks, but in recent times, the inclusion of technology in all the areas of the warehouse makes the tasks easier with increased efficiency and productivity. The implementation of technology does not guarantee optimisation if performance is not measured round the clock to achieve consistently and estimated productivity levels. If the warehouse performances are timely tracked, it’s sure to increase productivity and asset utilization with continuous improvement and enhanced customer satisfaction. Let’s look at some of the top warehousing KPIs that are sure to be tracked by warehousing managers.
Any warehousing operation will start with booking and receiving inward. Even though it seems like a simple task, it involves an end number of activities such as multiple new stock deliveries in a week, damaged goods returned by customers, return to vendor stock, etc. All these activities need to be tracked and measured using key performance indicators. This can be easily performed by paying close attention to the time taken to receive stock, count, book, and put away activities. With the recorded time, one can compare the performance of each month with the previous month and check performance improvement.
KPI#2 – Picking
One of the most time-taking and complex activities is pick. In case a wrong order is picked it means being returned and also paying for the mistake to correct it. The wrong pick will have a huge impact on the costs, market and customer satisfaction. What is important here is to make good use of racks and shelves to be organized and gain control.
KPI#3 – Carrying cost of inventory
Stocks not moving out of the warehouse costs the business. The carrying cost of inventory will tell you the exact cost of a business by adding up all costs related to inventory storage in a given period of time. This includes parameters like insurance, storage space, equipment, taxes, etc. Finding out the carrying cost will let the warehouse know how much profit the stock will bring and help make informed decisions.
KPI# 4 – Inventory turnover
Inventory turnover is another important KPI, closely connected with the cost of inventory. It is how quickly one sells and ships stock out of the inventory. The faster the stock is moved from the warehouse, the better the profit. The inventory turnover KPI allows keeping track of the moving stock and allows you to keep a tab of future buying practices.
KPI#5 – Rate of return
The rate of return denotes how frequently the items are returned by customers and the vital thing is to find out the reason for return. The warehouse manager has to look into the exact reasons and take the necessary steps into place. KPIs are essential for a warehouse for better control and monitoring. These are just a few KPIs; there are many others that can be analyzed and put in place. 20Cube logistics has taken the initiative through its Myhub+ application that keeps a tab of each activity for a controlled outcome that benefits the company to a lot extent.