Warehouse Key Performance Indicators for Supply Chain Management

“First thing to start-off digitalising is to look into your own process, not the technology.”

Bernard Hor. CEO of Hatio

Success cannot be determined without a clear definition of goals. Warehouse management is one area where this is especially true. Order cycle time and labour expenses are only two examples of warehouse KPIs that may be tracked to better understand how well a warehouse is performing in general. Warehouse KPIs measure productivity in the warehouse. Where should warehouse managers keep tabs on the most important KPIs? Here are ideas to get you started.

It is important to have a high level of inventory accuracy.

The warehouse management tracks physical inventory and compares it to what is actually present at the distribution center to determine inventory accuracy. Backorders, increasing inventory costs and COGS, and other significant aspects in inventory count will be a problem for warehouse management if the total quantity of things (i.e. the inventory levels) is wrong. Customer satisfaction will suffer as a result of this inaccuracy in inventory management. Warehouse management systems (WMS) using barcodes or other tracking technologies, rather than a spreadsheet with line items, are vital for maintaining inventory accuracy.

Accuracy in picking orders.

There are a number of warehouses KPIs that depend on order picking accuracy. Barcodes or other tagging and tracking technologies can be used to make it easier for a warehousing picker to locate products. For client happiness and a low return rate, order accuracy is essential. Tracking order picking and packing accuracy is an important KPI. Labor costs, the total number of orders picked in a shift or hour, and cycle time are all connected to order picking accuracy. Training and support for pickers is essential to ensuring the best possible accuracy rate.

Order processing time.

Customers’ average wait time for a product or service is measured using an order cycle time. Because customers have higher expectations for order accuracy, and they don’t tolerate late delivery, this has a negative influence on customer satisfaction.

Rate of return.

Customer returns are included in the KPIs for reverse logistics. When products are returned to inventory, inventory management has an impact on the cost of inventory and the amount of money it takes to keep it. When a higher percentage of orders are being returned, it could be an indication of an issue with the product’s quality or description. Because it can reveal additional inefficiencies in warehousing, this is an important warehouse KPI.

Efficiency in the warehouse.

Efficiency in the warehouse is a broad term that encompasses many different activities. When items arrive, the receiving area, putaway, and picking (which influences lead time and order picking accuracy) are all tracked using this efficiency KPI. Customers’ returns are also taken into account. Your warehouse management needs to dig further if the warehouse efficiency KPI is not meeting benchmarks.

Your warehouse operations will be more effective and your inventory will retain its worth if you track warehousing KPIs A strong link in the supply chain is provided by KPIs that function well. As a result of Hatio’s end-to-end visibility and integration, shippers can earn high customer satisfaction ratings and grow their operations while gaining a competitive advantage. To learn more about how Hatio can help your firm improve its key performance indicators, please contact us.