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warehouse distribution center

As one of the most labor-intensive parts of a supply chain, managing a warehouse means you have to constantly be aware of how efficiently your facility is running and what you can do to make it better. While there are a number of complicated metrics, tools, and formulas you can use to track how effectively your warehouse is fulfilling its duties, we’ve pulled together a few of the most common and high-level metrics and areas to look at when determining warehouse capability:

 

Operational Efficiency: One of the most important metrics to track, operational efficiency measurements primarily focus on the number and quality of daily work and activities performed in the warehouse. A few examples of metrics to track in this category would be:

  • Number of Products Shipped & Received: Are your shipments meeting your projections? Are the shipments you’re receiving properly stocked according to their shipment manifest? Checking the inbound and outgoing shipments from your facility can demonstrate efficiency and prevent issues later.
  • Number of Tasks Completed: Logging the work your employees do each day, from picking tasks to packing jobs to inventory checks and everything in between, can help demonstrate how effectively your material handling operations are.
  • Dollar Value of Handled Merchandise: One of the quickest ways to figure out the work standards of your warehouse is to count the total value of merchandise that comes into or leaves your warehouse each day. This will help ensure that your shipments are meeting your projections and find out where any loss or shortage is occurring.

 

Stocking Efficiency: Another cost-effective way to check the output of your warehouse is to check how your available storage space is being used, and ways to improve available inventory storage:

  • Use of Space: How does your warehouse make the most of its available horizontal or vertical space? Is all of your wire shelving and industrial storage being used to the fullest? Should you bring in storage security to keep your shipments safe? Should anything be moved around to allow greater item capacity?
  • Task Efficiency: Similar to the number of tasks being completed, if tasks are being completed effectively and on time, this can affect the rest of your warehouse’s operations. Make sure your picking, stocking, and replenishment tasks are being completed effectively and on-time.

 

Fulfillment Efficiency: This set of metrics, and arguably one of the most important ones in determining warehouse effectiveness, measures the ability of a warehouse to fulfill orders on time and in full.

  • On-Time Order Fulfillment: Are your orders being filled by their due dates? Are your workers able to complete all their tasks in time to get orders out the door when they need to be, or are there operational bottlenecks preventing their work from being completed when it needs to be?
  • Correct Orders: Just as important as orders being fulfilled on-time is orders being fulfilled correctly. Are your workers trained on how to complete an order to the letter, or are there errors occurring in the work process anywhere?
  • Proper Invoicing and Order Entry: In order for orders to be completed correctly, orders need to be entered and billed correctly into your tracking system. Are your records accurate, or are there incorrect billing and/or shipment ledgers that prevent your warehouse from reaching its potential?

 

With these tips, you should be able to get a good idea of how your warehouse is operating and make adjustments to help reduce errors and remove bottlenecks.

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