KPIs to mea­sure ware­house ef­fi­ciency

Close mon­i­tor­ing is re­quired to mea­sure the per­for­mance of a ware­house, which is an in­te­gral part of the sup­ply chain. There is a need to pro­duc­tively utilise the huge amount of data gen­er­ated by a ware­house to gauge its ef­fi­ciency and meet the sat­is­facti

Cargo Talk - - Warehousing -

The im­por­tance of ware­hous­ing to the sup­ply chain can­not be un­der­es­ti­mated as it is a crit­i­cal junc­tion in sup­ply chain net­work and en­sures a buf­fer of stock (raw ma­te­rial or fin­ished goods). De­spite the fact that ware­houses are looked upon as mere stor­age cen­tres by many, their role in pre­serv­ing the in­tegrity and use­ful­ness of the stored items nec­es­sary for main­tain­ing cus­tomer sat­is­fac­tion can­not be ig­nored.

While judg­ing the util­ity and ef­fi­ciency of a ware­house, sup­ply chain com­pa­nies are some­times forced into a dilemma about the choice of the nec­es­sary fac­tors that they would need to take into ac­count while eval­u­at­ing its suc­cess­ful func­tion­ing.

Such fac­tors are termed Key Per­for­mance In­di­ca­tors (KPIs). Th­ese en­able users to as­sess and re­alise the ef­fi­ciency and util­ity of the ser­vices pro­vided to them by the ware­house providers. The KPIs mea­sure per­for­mance of the busi­ness to bench­mark against the com­pe­ti­tion and ex­plore the pos­si­bil­ity of im­prov­ing to gain com­pet­i­tive ad­van­tage.

Th­ese KPIs are ar­dently fol­lowed and taken into ac­count while try­ing to in­crease the flex­i­bil­ity, im­prove the ef­fi­ciency, man­age costs and stream­line the func­tion­ing of the sup­ply chain. If the prod­ucts do not move seam­lessly within, the sup­ply chain busi­ness would face se­ri­ous ser­vice re­lated chal­lenges. Hence, it is nec­es­sary to drive the per­for­mance of the ware­house through the KPIs.

A dis­cus­sion with the veter­ans of the cargo sec­tor re­vealed the KPIs that in­di­cate the ef­fi­ciency of a ware­house:

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