What To Measure in Warehousing:

The answer to the common question “What should we be measuring?” is two fold-At its core, a supply chain analytics solution should provide an enterprise level view of warehouse operations, empowering your team with timely, meaningful information that drives process improvements. This should include a set of industry-standard,best practice KPIs (Key Performance Indicators) for your operations.

However, to maximize your investment, your supply chain intelligence software should include tools that allow you to create metrics based on your company and its own way of doing business.

Dashboards and Metrics:

Let’s first look at the foundation of metrics you may consider as a starting point. Metrics should generally fall under dashboards that address a specific area of your organization, such as inbound or outbound operations. In some instances, the dashboards have drill-down capabilities where a more granular layer of information is presented.

Any software provider should offer, at a minimum, the foundation for best practice analytics. Compare these to what you’re already tracking, and consider which ones to add or remove.

Your metrics should cover these dashboards or areas:
1. Inbound
2. Outbound
3. Order Accuracy
4. Customer
5. Quality
6. Capacity and Utilization

The following is a breakdown of each dashboard and the KPIs to track with each.

1. Inbound
a. Dock-to-Stock
b. Percentage of Supplier Orders Received Damage-Free
c. Orders (POs) and Lines Received per Hour
d. Suppliers On Time

2. Outbound
a. Line Fill Rate
b. Order Fill Rate
c. Fill Rate Percent
d. Lines Picked and Shipped per Hour
e. Orders Picked and Shipped per Hour
f. On Time and Ready to Ship

3. Order Accuracy
a. Order Pick Accuracy
b. Order Pick Accuracy by Type
c. Orders Shipped Complete
d. Cases Shipped vs. Cases Ordered

4. Customer
a. Percent of SKUs In Stock
b. Cycle Time Percent (Internal versus External)
c. Back Order Percent
d. On-Time Shipments

5. Quality
a. Percent Unsaleable
b. Inventory Count Accuracy
c. Inventory Shrinkage by Month
d. Inventory Shrinkage by Type

6. Capacity and Utilization
a. Honeycomb Percent
b. Days on Hand by Inventory Type
c. Days on Hand by Item
d. Percent Capacity Used by Storage Device
e. Shelf Capacity Used by Inventory Type

Tools For Maximizing your Analytics:

Metrics aren’t helpful if they are rigid, lack context or can’t be manipulated and investigated to help you determine the best course of action.

Beyond the set of best-practice metrics for measuring your operations, you’ll also need tools that allow you to create metrics based on your company and its way of doing business to give you a better understanding of what’s really going on in your operations.

Whether or not you’re planning to implement a new workflow or not, it’s important to pause, take stock of where you stand on KPIs for your industry and company, and set your benchmarks so you’re maximizing your investment in both your analytics and any other warehouse technology.

Having a foundation of best practices, along with the flexibility and other tools that help you leverage the data according to your needs, will help you improve the tactical and strategic nature of your operations every step of the way.

Download the complete document below:

Suppl Chain Analytics: Tools and Tips for Continuous Improvement