Whether you love metrics, or hate them, they’re important. With the right data, you can make informed decisions about inventory, storage, warehouse layout, and more.
But discovering which metrics help your business the most can be a long process. Even if you hire a full-time data analyst, like many businesses are planning to in 2020, choosing the right metrics can be a struggle.
Read on to discover some basic metrics to help run your business more effectively.
Important KPIs
KPIS, or key performance indicators, are data calculations that provide an overall look at your warehouse’s health. However, there are many different aspects of running a warehouse. From maintaining vendor relations, to ensuring adequate inventory, there is plenty of data to sort and sift through. These KPIs provide a solid starting point for tracking your warehouse’s performance.
Receiving and Put-Away KPIs
Volume per Employee: Tracking how many products move compared to your employee count allows you to see how effectively your employees are utilized. From there, you can make decisions about whether to hire more staff, or to train staff to improve their effectiveness.
Delivery Accuracy: Inaccurate deliveries create a bevy of problems, ranging from additional labor to put products away, to lost revenue, to lost customers. Tracking the accuracy of your deliveries can help you pinpoint problem areas.
Labor Costs: Keep an eye on labor costs associated with receiving items. While many warehouses think primarily of the cost of shipping and movement, the labor costs associated with receiving can be unexpectedly high.
Storage KPIs
Inventory Turnover: The correct storage and processing of inventory can help warehouses save money. Otherwise, bloated inventories cost a lot, in terms of space and upkeep. Inventory turnover can be calculated by the cost of total goods sold during a period divided by average inventory value.
Carrying Cost of Inventory: Calculate how much it costs to carry inventory by multiplying how long a product stays in the warehouse times the average inventory value.
Other KPIs
Shipping KPIs: Compare actual shipments to projected shipments. If there’s a large discrepancy, you have problems with your warehouse. Either examine your projected goals, or get to the heart of what’s delaying your shipments.
Inventory Accuracy: Your inventory accuracy can be measured by comparing your measured inventory against your actual physical inventory count. With a good ERP or WMS, the two should be the same.
The Bottom Line
Finding the most important KPIs for your business can be a challenge. But the accurate tracking and measurement of key metrics can help make your business more robust and more profitable.
Need help tracking your KPIs? Contact Vodigy! Vodigy helps small businesses step into the future by harnessing the power of technology. Call us today!
