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E-Commerce Jul 19, 2022

KPIs to Measure Warehouse Performance and Efficiency

Kseniia Hrechyshkyna

Kseniia Hrechyshkyna

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KPIs to Measure Warehouse Performance and Efficiency

Time to read: 15 minutes

It is difficult to imagine a prosperous e-commerce business without a warehouse—a space that stores products for stocking, packing, and shipping preparation before they are distributed or sold.

Multiple supply chain representatives, from manufacturers and wholesalers to distributors and third-party logistics providers, use warehouses. Each of these representatives should use warehouse KPIs to maximize the efficiency of the warehousing process.

This article will help you dive deeper into the warehousing concept and learn more about the top 22 warehouse KPIs that you should measure.

Understanding the Warehousing Process

As we have mentioned, a warehouse is a place where businesses store and manage their inventory. Thus, warehousing is a critical component of any e-commerce supply chain because it directly affects the safety and security of stored goods, their timely delivery, and customer satisfaction.

Warehouse KPIs

Research shows that 67% of businesses believe that running out of stock after an order is placed (i.e., overselling) is the top inventory mistake that leads to lost customers. Therefore, you should have a comprehensive approach to manage your warehousing processes, which includes the following activities:

What are the benefits of warehouse management?

Warehouse management provides various advantages for your e-commerce business. By successfully managing your warehouse, you gain the following benefits:

Benefits of Warehouse Management

Top 22 Warehouse KPIs

To reap the benefits of your warehousing practices fully, it is imperative that you measure warehouse KPIs. Warehouse KPIs function in different ways, but the majority apply to most warehouses.

This section explains the top 22 warehouse metrics that help you improve the performance of your warehouse and overall business. Depending on your business objectives, you can use all of these metrics or combine some of them.

Inventory KPIs

Inventory KPIs involve any activity that relates to the products you store in your warehouse. These metrics help track the movement of your inventory. To measure the performance of your warehouse inventory management activities, consider using the following KPIs:

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Picking KPIs

Tracking picking KPIs helps companies properly configure the picking process, which is the process of selecting the right product after an order has been placed.

Distribution KPIs

Distribution KPIs measure the efficiency and performance of the flow of products from the warehouse to the customer. Distribution metrics can be used in addition to other processes, such as channel design management, third-party logistics, fleet management, logistics health and safety, and order picking and shipment.

Receiving KPIs

Receiving inventory is the process of ordering and shipping new inventory to your warehouse or 3PL. The following metrics will assist you in accurately measuring your warehouse receiving activities:

Put-Away KPIs

In warehousing, put-away processes include all activities that occur between receiving goods from suppliers and putting them away in their assigned places. Evaluating the put-away metric enhances storing activities, reduces the risk of misplacing or losing items, and keeps your warehouse organized. Some beneficial put-away KPIs include the following:

Safety KPIs

Ensuring safety is one of the top priorities in everything you do in the warehouse. By measuring the following metrics, businesses can prevent work-related injuries before they occur.

Cultural KPIs

Cultural KPIs measure the company culture, which reflects how a company treats its employees and how it fosters employee engagement, productivity, and performance.

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Conclusion

When you own an e-commerce business, you should conduct many activities to ensure that your company performs well. Warehouse management is one of these activities. Paying attention to this process will result in on-time shipping, exceptional customer service, and higher profit margins.

To ensure that your warehousing area performs correctly, it is important to conduct regular assessments using the top warehouse KPIs that we have identified. If you are searching for a digital solution to improve KPIs related to your warehouse and e-commerce, contact Dinarys. As a leading e-commerce software development services company, we know how to digitize your warehouse activities and create a better customer experience.

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