If you were asked the question – ‘Have you had a good day in the warehouse?’ How would you begin to answer that? Tracking specific metrics for your warehouse KPIs is vital to keep a pulse check on how effective your operation is. It also helps if you’re under performing, to be able to take action quickly or over performing to understand how.
Without knowing your benchmarks for the following stats, proactively building your operation for growth can be tricky.
Quantity of Dispatch per Day by Warehouse Worker vs Target
How many parcels do you want to ship per day, per warehouse worker? Having an accurate and live view of this will enable you to act in real time if you are under or over target. It enables your to promote or reward the best workers for achieving over any targets. It also allows you to easily assess how your day is going – this is a metric a warehouse manager should have at their fingertips.
Flexibility with picking strategies can be a secret weapon for efficiency. Using a variety of ‘pick methods’, as well as altering how the warehouse itself is set up, means you can build your operation bespoke to your business requirements, customer promises and product types. For example, utilising a ‘pick and sort to trolley’ style of picking can be highly effective if you receive a large proportion of smaller multi-item orders.
How effective are you at receiving deliveries and getting them ready to be picked and sold? There are many ways to measure this – but a simple option is to use time. The time it takes from receiving and scanning your delivery to that item being in the right location in your warehouse ready to be sold. Your goods-in process – could be leading you down a path for inventory issues.
Picking accuracy is a measure of how often workers in a warehouse select and retrieve the correct items from inventory. A high picking accuracy means that employees are consistently selecting the right products, which leads to accurate order fulfillment and customer satisfaction. Conversely, low picking accuracy can result in mistakes, delays, and dissatisfied customers. This warehouse KPI is particularly important in ecommerce and retail industries where precise order fulfillment is essential for a positive customer experience. A benchmark should be around 99% – anything lower and you may see some 1 Star reviews coming your way.
We explore 10 common problems with order picking here and how to solve them – helping you improve your accuracy.
Inventory Turnover= Average Inventory Value/Cost of Goods Sold (COGS)
Your warehouse has a crucial role in keeping your inventory turnover at an optimal number throughout the year. The turnover ratio benchmarks vary so wildly depending on industry and sub-sector – however keeping a track of yours and working to make year on year improvements will set you up to scale. Being aware of what exactly is in your warehouse, how long it has been there and where it is will allow your sales and marketing teams to develop campaigns and initiatives to move that slow stock.
Number of Mis-Ships
Are you shipping the right items to the right customers? Out of 100 orders – how many orders make it to the wrong customers or contain the wrong items? This is your mis-ship % rate. This should always be below 1% as it helps with profitability, customer satisfaction and brand advocacy – all key drivers for growth. Mis-ships are a lagging indicator of how optimised your warehouse processes and set up are.
Onboarding time of Staff
Scaling up and down with warehouse staff during peak periods can be a tiresome task. Using technology can reduce the need for temps – but sometimes they are necessary. Calculating how quickly you can get a new recruit from stepping in the facility to picking and packing orders like a pro can make all of the above warehouse KPIs move in the right direction.