The 5 Warehouse Management KPI Groups to Track

Posted by Port City Logistics on Aug 2, 2022 12:16:50 PM

Warehouse managers have a lot on their plate. Maintaining safety requirements with warehouse efficiency adds up to a delicate balance of numbers, products, and the people that make the warehouse more than just a building. Key performance indicators (KPIs) keep track of the effectiveness of the multiple moving parts within each warehouse. KPI tracking provides companies with actionable analytics to guide future expansion, minimize costs and give employees a goal to reach company-wide. 

Warehouse KPIs are especially essential in the current economic climate. In March 2022, Supply Chain Brain wrote, “wholesale inflation has hit an 8.3% year-on-year increase, the largest single annual increase in the department’s history. Every part of the chain is a factor, from fuel prices to raw materials such as lumber and steel. The supply chain, meanwhile, is dealing with unreliable projections for revenue or margins.” As unpredictability marks the supply chain, the following five warehouse KPIs are essential to warehouse management best practices that give managers data to boost accuracy and excellence in and out of the warehouse.

Inventory KPIs

Much of a company’s warehousing capability starts with its inventory. Yet, there is little use in storing products without visibility to guide operation decisions. Warehouse management best practices advise managers to better understand their inventory’s efficiency, starting with the following KPIs. 

  • Tracking Products – Despite the intended organization, products can easily get lost within the warehouse.
  • Automated Orders – While automation is a gift to humanity, human oversight through KPI tracking ensures nothing gets left behind.
  • Real-time Availability – Today’s freight world may expect delayed shipments, but this concept should not apply to inventory levels.

Picking KPIs

Whether in a pick and pack warehouse or a traditional setup, warehouse management best practices beg for insight into this process. In addition to alternative fulfillment setups, sometimes picking is performed wholly or partially via robotics. Therefore KPIs become even more essential to tracking performance for ROI. Some picking KPIs include:

  • Time Filling Orders – Analyzing the units packed per hour, or the complete fulfillment timeline of one order, warehouse managers gain insight into realistic employee expectations.
  • Rate of Errors with Orders – KPI tracking picking errors ensures that freight efficiency is never unknowingly traded for an increase in errors.
  • Popular Inventory Items – With real-time visibility, warehouse managers know when an item has become popular or obsolete and how that impacts future orders.

Distribution KPIs

Industry warehouse management best practices assume that distribution is the most crucial step of the supply chain. It’s the whole reason for its existence! Therefore, warehouse managers succeed by tracking multiple data points surrounding the following three categories.

  • Rate of Shipping – Whether it’s the number of loads driving out per day or how many units per transaction, distribution KPIs matter.
  • Rate of Returns – Warehouse managers can provide retailers with consumer insight by classifying returned merchandise by cause.
  • Distribution Distance – By separating shipments by distance, managers gain insight for collaboration, such as local warehousing partnerships. 

Receiving KPIs

Tracking drayage efficiency is essential for warehouses closest to an airport or port. Port City Logistics understands this and stands out as an example of a company that follows warehouse management best practices. They and other industry experts know that vital warehouse KPIs to consider in receiving include:

  • Rate of Stock Receipt – This KPI is essential to track peak seasons for various products and ensure adequate staffing is acquired.
  • Load and Unload Times – Tracking various product unload times gives managers insight into varying unloading needs. 
  • Time Between Orders – Managers can leverage quiet times at the dock for inventory organization or even industry training

Delivery KPIs

As West Coast ports activate new measures and fees to expedite freight container turnaround, warehouse management best practices have expanded past getting a delivery time stamp. With extensive KPI tracking abilities, managers can gain insight into any details from when freight leaves the warehouse. The top three delivery KPIs to follow are:

  • Time In Transit – Understanding drive time is especially pertinent to port warehouses that leverage their own first-mile delivery services.
  • On-time In-Full Rate – By gaining access to OTIF rates, warehouse managers learn if their packing needs to be adjusted to raise OTIF rates.
  • Customer Claims Rate – While customer claims may not be the warehouse's top priority, this KPI can be used to improve warehouse operations.

Keep Up With Warehouse Management and Track KPIs Effectively With Port City Logistics

Incorporating KPIs into daily operations is among warehouse management best practices for a reason. They provide a tangible report to give to those higher in the company to advocate for realistic expectations, ROI of new technology, and more. Learn how you can benefit from a technology-rich 3PL that can take your warehousing operations to the next level and start a conversation with Port City Logistics today.

Topics: warehousing goods