Why are KPIs Important?

Warehouse managers face many challenges. Customers need to get the products they order. Employees want a pleasant and rewarding work environment. Suppliers must have access to the latest routing guides for incoming cargo and more. These challenges can be significant, but warehouse and supply chain managers can simplify the process by following these key performance indicators (KPIs). Key Performance Indicators (KPIs) help identify and define progress based on defined goals. Although key performance indicators differ across companies and industries, they are critical to the success of a business.

Why key performance indicators is so important for warehouse

  • They reflect the goals and goals of your business and measure the performance of your business over time. If you have no standard for measuring your performance, you can not identify areas for improvement.
  • KPIs are essentially a performance dashboard made up of benchmarks that help you reach your business goals, identify areas for improvement, and compare your performance with your competitors..

Listed below are important KPIs that will help your warehouse operate more efficiently and effectively.

Inventory Accuracy

Of course, inventory is an important part of warehousing, and inventory accuracy is a critical key performance indicator for warehouses, because if your inventory tracking is incorrect, your costs will skyrocket and your satisfaction will increase. Customers will fall. If you use Excel or manual processes, the accuracy of your inventory is far too low and it is likely that due to inaccurate numbers, you are likely to finish reorganizing or manufacturing parts you already own. The cost of too many stocks or the annoyance of customers who do not have stock in stock will not only hurt your sales, but your reputation as well. One solution to inaccurate inventory is to choose a system that uses barcodes to track inventory. Some warehouses find that bar code systems integrate with their current computerized maintenance management (CMMS) systems. These systems improve inventory control by providing a management framework for inventory, consumables, and other storage material. In addition, some inventory management services have the ability to track shipments, manage orders, and monitor inventory and inventory levels.

Efficiency of receiving

One of the most critical processes of a warehouse is the receipt of stocks; The efficiency of the voucher is therefore a KPI for the warehouses and must take into account the volume received, the customer returns, the missing and damaged stocks and the return to the supplier stock. Karl Friesenbichler, an expert in the automation industry, reminds warehouse managers to group numbers by source and time to identify “peak times, quality issues with suppliers, and supplier returns.” You need to be aware of the pace at which inventory is being counted, and you’ll be able to detect reception gaps that you can fix to eliminate a chain of inefficiencies in your warehouse Reception per Receipt Line, Received Volume per Pager, Proportion of Use of Loading Dock, Specific Reception Percent and Processing Time, Receipt, etc. Warehousers can easily ignore the receipt for picking and shipping KPIs badly designed and poorly managed reception areas However, if you suffer from a reception deficit, your entire operation will have an impact.

Picking and packaging costs

Most warehouse managers believe picking is one of their most expensive and difficult processes because it requires the most work. Preparation and packaging processes are often more complex than other processes, and they are critical to a company’s bottom line because they are directly related to customer satisfaction. The key picking and packaging performance indicators must include the costs per item selected, hourly orders, labor costs, consumables used and cycle times per order. You can measure the accuracy and speed of order picking and packaging, and one specific measure you need to consider is your percentage of perfect pick lines.

Stock rotation

A strong inventory turnover is good for your warehouse. It is useful to reduce inventory turnover to a key performance indicator that gives you visibility into your inventory levels, as it helps you assess purchasing practices and product demand. Your warehouse management system can provide a solution to gain insight into the rotation of your inventory and to forecast your inventory. Keep in mind that Inventory Turns measures how many times each year your inventory is searched. You need to compare this rate with industry averages to see how your warehouse works

Customer Cycle Order Time

Do not be so impressed with the performance counters of your installation that you forget about your customer actions. While customer feedback is certainly helpful, you need to anticipate your customers’ overall satisfaction by using metrics like customer cycle time. Of course, customers do not want to wait too long for their orders, and the warehouse is at the forefront to avoid customer frustration and impatience. Your delivery windows must match the rest of your industry. Keep in mind the reverse logistics and make sure your return process and schedule are synchronized with your order process. All warehouse managers strive to reduce costs more efficiently and increase sales. By leveraging these key inventory metrics-inventory accuracy, inbound efficiency, pre-pack and packing costs, inventory turnover, and customer cycle ordering cycle-warehouse managers can manage a cost-effective warehouse. streamlined and efficient. satisfied.

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