Key performance indicators (KPIs) are a measurable value linked to the main business objectives and are important for setting long-term production goals. Monitoring warehouse KPIs allows you to find and prioritize problems within the warehouse or distribution centre.
What are the main KPIs in logistics area management?
Receiving KPIs
The first series of KPIs to have under control concerns the receiving phase of the goods, specifically: use of the workforce, accuracy and timeliness of delivery, labour costs, order return rate.
Incoming goods must be tracked in terms of volume stored per employee per hour. It is also important to track the cost per line item, accuracy and timeliness of incoming transport and labour costs associated with receipt. These KPIs can be used to improve supplier relations and increase staff productivity.
Storage KPIs
Warehouse management KPIs are based on storage activities. It is necessary to monitor the turnover of the stocks, their transport cost and the average value of the stored goods.
Collection and packaging KPIs
The picking and packaging KPIs include the average number of items picked per employee, the total value of the picks and their average, the labour costs employed, the cost of packaging and the time taken to complete the order.
Shipping KPIs
Shipping KPIs focus on the total number of items shipped compared to the expected number of items to be shipped. This KPI is obtained by dividing the total number of orders shipped by the expected number of shipments: the desirable result is as close as possible to 1.
KPI of reverse logistics
The KPIs of reverse logistics are those that revolve around returns. Although there are several reverse KPIs, the most important is the return rate, which is calculated by dividing the number of units returned by the total number of units sold. The increase in the resulting number suggests a possible problem with a product.
Inventory accuracy
The accuracy of the inventory is a measure of the inventory recorded by the database compared to the actual inventory. It is calculated by dividing the database inventory count by the staff inventory count. If both counts are accurate and identical, the result should be the same.
Equipment KPI
The equipment must be monitored to ensure maximum safety and correct operation times until the next scheduled maintenance. This is calculated by dividing the time for which the machine has been used since the last maintenance by the average time between maintenance. The result shows how long the equipment can run before maintenance is required.
Having the warehouse performance under control allows you to intervene promptly to improve efficiency: Di Massa is at your side to support you in identifying any criticalities in your logistics area and to optimize the workflow, guaranteeing concrete results and an increase in margins. Contact us to find out what we can do for your warehouse!
