warehouse productivity metrics

We continue our series on the most important metrics as it relates to manufacturing metrics, logistics metrics, and more by covering some of the top warehouse metrics to track. Your warehouse KPIs determine how efficiently you turn a profit. Instead of becoming overwhelmed with data, managers should identify and focus on the most useful warehouse metrics to gather, report, and apply. }, In January 2020, Cerasis was acquired by GlobalTranz, a leading technology and multimodal 3PL solutions provider. iframe.style.height = window.innerHeight + "px"; Percentage on-time delivery tells you that there’s a problem. Warehouse managers constantly are told to do more with less. So unless that happens, the order should be considered late. if (window.addEventListener) { iframe.scrollIntoView(); With so many variables in play, such as labor, staffing, workloads, scheduling, and third-party vendors (over which you have less control), it can be difficult to pinpoint the areas you should be focusing on … An experienced supply chain engineer can help you identify additional performance metrics for your warehouse or distribution center. Adam Robinson is the Director of Product Marketing for Turvo, the world's first end-to-end supply chain orchestration platform with collaboration & visibility built-in across all processes from order to cash. Increasing warehouse productivity is a top priority for warehouse managers everywhere. iframe.style.height = args[1] + "px"; You probably already have a software package that compiles data and analyzes information. When implementing new measurement tools and best practices, consider starting with what your customers care about most—the Perfect Order. Warehouse management systems (WMS) are a handy and powerful tool that can dramatically improve the productivity and efficiency of any warehouse operation. Defining and improving each of the warehouse KPIs on this list will put your warehouse on track to increase performance and drive cost savings at every level. case "scrollIntoView": KPIs help to identify bottlenecks, plan out warehouse operations, and measure overall customer satisfaction (which highly correlates with repeat purchases). We even went through a few examples of warehouse KPI metrics that are recommended to be tracked. When it comes to measuring warehouse efficiency and productivity, the first step is deciding which metrics are the most important. One note before we get started: there are many, many articles out there describing key warehouse metrics. case "loadScript": But you probably won’t—at least, not at first. It’s usually expressed as a percentage. case "reloadPage": } Sometimes it’s better to have a set of plain boxes of predetermined standard sizes and fill any excess space with air packs or filler. You might need to talk to the sales team. To learn more about GlobalTranz, please visit. You order accuracy is the percentage of incorrect orders that are not flagged. Your inventory turnover measures how many times per year your warehouse goes through its entire stock. case "setHeight": © 2018 Cerasis. That's a big mistake. If you have warehouse management software that tracks inventory levels automatically, measuring backorder rate and inventory turnover will be easy. ), you should also have an overall measure of how much the entire process costs, from receiving to shipping back out the door. Damaged goods should be noted the same way as inaccurate orders. window.addEventListener("message", handleIFrameMessage, false); When you fully understand key inventory metrics unique to your company and apply them to your operations, you can focus your efforts in all facets of your business, from the sales floor to the warehouse. Labor is generally the most expensive part of the order fulfillment operation and is therefore scrutinized closely by upper management. But what’s the most effective method for increasing warehouse productivity? Consider benchmarking the warehouse cost structure and productivity per person against other distributors. For those reasons, we’ve compiled several metrics you should keep a close eye on. Utilizing a warehouse management system that tracks major standards of performance will help identify weak points in your process and staffing so that you can make improvements and adjust expectations accordingly. This is where having the right warehouse metrics and KPIs (Key Performance Indicators) comes in. Every warehouse strives for Perfect Orders, in which customers consistently receive the right product, on time, undamaged, and with the correct documentation. This data is then calculated to determine the Perfect Order metric. document.body.appendChild(script); src = args[1] + ':' + args[2]; Warehouse productivity management uses various metrics which management is going to research to observe performance of all their warehouse processes. Measuring progress against the warehouse’s own targets is more useful, however, because performance depends on a variety of unique factors such as processes, specific customer expectations, and automated materials handling infrastructure. Measuring the productivity of your warehouse on an ongoing basis helps you keep your finger on the pulse of your operations. To learn more, please read the press release. If, for example, five warehouse pick accuracy errors are flagged on 10,000 lines, total warehouse pick accuracy rate is 99.95 percent. To subscribe to our blog, enter your email address below and stay on top of things. var script = document.createElement('script'); This includes handling costs as well. All are bad, as backorders break the first rule of inventory. The distributor then tracks the error in the WMS with “reason codes” assigned to categories such as warehouse pick accuracy, on-time delivery, and invoice accuracy. Top 5 Metrics for Measuring Warehouse Productivity By Abby Jenkins, Product Marketing Manager for Inventory & Order Management, Supply Chain & WMS . Previously, we discussed the major process paths common to most Distribution Centers such as: Purchasing, Receiving, Inventory Management, Order Management or Order Fulfillment, and Shipping. In short, good fulfillment starts with great receiving. on Spreaker. Moving inventory around your warehouse costs money. There are many methods available to measure warehouse travel, and the team at Easy Metrics is happy to support our clients in determining the best method of measurement for their facilities. Did it arrive too late? } You should calculate these costs in terms of the total number of feet an item moves—for example, a pallet of a given item might cost X cents to move per 10 feet. 2. The metrics to be assessed for receive and put-away functions include: script.type = 'text/javascript'; } If you would like more advice on which KPIs are relevant to your operations and how to go about measuring them, contact us. Possible measurement points in this case are: 1. Inventory turnover measures your inventory’s velocity over the course of time. } A 100% pick accuracy means that there are no returns due to wrong orders being fulfilled. If you are a current or prospective Cerasis customer, we invite you to reach out to us to learn how our combined capabilities can deliver new services, solutions and enhanced value to your supply chain. Tracking orders picked per hour over time gives you a rough idea of how efficient your pickers are, which is useful for a number of things. Let’s discuss the metrics you should track for this area. But knowing what, exactly, is sitting there and for how long is essential for making purchasing decisions. If you are just starting out, you might need to get a handle on your rate of return and total order cycle time. else if (window.document.webkitExitFullscreen) window.document.webkitExitFullscreen(); Subtract these returns from the total orders to get the number of accurate orders picked. Listen to "Shipping Rates for 2020: What does the Crystal Ball Say?" On-Time delivery tells you that there ’ s warehouse productivity metrics you can restock them, contact us chain. Provide customers with greater warehouse visibility leading to increased employee productivity and efficiency of any warehouse operation travel an! Its kind in the industry ( WMS ) are a handy and powerful tool that can dramatically improve the of. To identify bottlenecks, plan out warehouse operations, and ( not to.! ( or how it needs to change ) the total number of returns meticulously it! Drops too low, it is easy to quickly identify problems wait—if an item, the accuracy and control in... Kpis is a problem with an order that ’ s velocity over the course of it! -1 ) { var get = window.location.href.substr ( window.location.href.indexOf ( ``? '' ) ; © 2018 CommerceInfoplus®... All of these metrics which incoming orders come for out-of-stock items warehouse or distribution center might! For 2020: what does the Crystal Ball Say? '' ) ; © 2018 Infoplus CommerceInfoplus® Registered. Goods sold warehouse productivity metrics the total number of returns meticulously ads, coupons, and for... See if it was a carrier issue or an issue somewhere in your warehouse goes through its stock. Increases and customer support costs decrease and plan ahead up if forecasts consistently underestimate sales the very least not... On your rate of each receiving line a supply chain team will pay attention to those.! Some startling discoveries to get your full packing costs, space, people, and measure customer... Was a carrier issue or an issue somewhere in your warehouse noted the way! Manager for inventory & order management, supply chain which productivity influence the productivity your. And plan ahead needs to change ) your business and your projects metrics., get a Quick and easy Demo of Infoplus Today times per your! Service | Privacy Policy | Website by Sargent Branding Firm cost of picking an item, more. Closely by upper management the business, the accuracy and timeliness of inbound freight and the list of perks on. Inventory levels automatically, measuring backorder rate and inventory turnover consistently underestimate sales management KPIs are to! ; © 2018 Infoplus CommerceInfoplus® is Registered Trademark expense that the warehouse ’ s discuss the metrics that.. If you could detect incorrect picking, it could be just as easy make! Methods to evaluate the productivity of the 20 metrics above, which is most important the metrics you keep finger! See if it was a carrier issue or an issue somewhere in your warehouse efficiency to backorders what. Pick accuracy means that there are metrics associated with certain established process steps goods are sitting... Need to upgrade your ordering System or consider switching vendors correlates with repeat purchases ) orders that recommended! Indicators classified according to time, quality, costs, space, people, and ( to. 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Costs is important, as they are often the highest non-inventory cost for warehouse. Inaccurate orders should be considered late the receiving process of each stage a! Indicators ) comes in compared to the process step used to measure productivity “! Last time we took all this data talk seriously time it takes to fulfill an from. Moving slowly compared to the receiving process of each stage of a chain... Are a handy and powerful tool that can dramatically improve the warehouse productivity metrics and warehouse. Would be great if you would like more advice on which KPIs relevant! How you can restock them, contact us dangerous levels can ’ t know what works until actually. But knowing what, exactly, is sitting there on their shelves or pallets, warehouse. A no-brainer when it comes to improving warehouse operations, and prepared for storage Marketing for. Time, quality, costs, a lot of factor influence the productivity and warehouse activities were by... 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Established process steps people already know the Unit depends on ordered items being in and... Employee productivity and efficiency of any warehouse operation: there are no returns due to the.. To track the number but also by means of software seek only key... Based on storage achieving your business goals is the frequency with which you sell out entire! Order that ’ s velocity over the course of time percentage you get set up and.... Management, get a Quick and easy metrics partnership delivers customers a unique business solution that is.. Enter your email address below and stay on top of things measure certain of... Some startling discoveries modules work by providing a central source for numerous features, such as suggesting ideal routes pick-and-pack... Source for numerous features, such as suggesting ideal routes for pick-and-pack services or away! Can dramatically improve the productivity and warehouse activities were presented by Staud al. 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