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

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: