Key Performance Indicators for Warehousing and Distribution
KPIs for Warehousing and Distribution: Properly managing products in your warehouse then distribute it to retailers or customers is critical. This can sometimes be a tedious and difficult process. Measuring the different processes going into warehousing and distribution will make things much easier.
Using key performance indicators is the perfect strategy you can use to tackle this issue. Key performance indicators can help you overlook certain metrics which will help you spot inefficiencies within your system that you can then solve. When you implement key performance indicators it will make your processes far more transparent and easier to manage.
Below you can see examples of key performance indicators. You can use them to make your warehousing and distribution processes better.
Order fill rate
Tracking the amount of orders you fulfill on any given day is a very important metric. It will show you how efficient your warehouse is at filling orders. Having a fast and efficient warehouse is necessary and this metric will help you on that.
Days on hand
This metric will help you to measure the number of days you hold an inventory for. Holding an inventory over a certain period of time can get quite costly because it affects holding cost.
Sometimes this can happen because your product isn’t in demand; this can be due to seasonality. If you use this metric over a period of time and take a bird eye’s view on everything probably over a year. It will help you to spot certain patterns when your product is selling the most. So when that time comes around you can create more products to meet customers demand. This will also prevent unnecessary over producing on a certain product.
Cost per order
Keeping cost per order low can save you a lot of money in the long term. It is important to track the cost of filling customer orders. This data will help you see if your cost per order is at a stable price over a period of time. If it’s not at a stable price and it just keeps going up. You might need to investigate it to see what the problem is.
Dock to stock time
Tracking the process of unloading to storing of goods in inventory is another important metric you must check for. When you measure this metric it will help you to develop ways to make your dock to stock process shorter. So you can make your warehouse runs more efficiently.
Perfect completion rate
Tracking the rate of your order completion process will help you spot inefficiencies to make the process better. When you regularly complete your orders without any problem that’s a good sign. If on the other hand, you regularly notice problems in your order completion process this will help you spot them. So you can develop strategies in order to make this process better and run more smoothly.
Managing your warehouse and distribution processes using key performance indicators will help make managing your overall processes easier. When you start tracking certain metrics it can make the information be more transparent. So you can then discuss them with your team. This will help you spot inefficiencies within your warehouse and distribution system. This will make the overall processes runs more efficient.
More on KPIs