Key performance indicators (KPIs) are frequently used in general business to evaluate the success of everything from a specific department to an entire enterprise. They focus on strengths and weaknesses. Many warehousing KPI’s tend to be focused on external performance, such as on-time shipments that directly impact customers. This is a good measure, but the need to go deeper and measure the factors that drive those success rates is critical.
The Warehouse is a Critical Function
Companies that relentlessly measure sales, customer service, financial, and other functions sometimes treat their shipping and handling operations as an afterthought, which is unfortunate, because the warehouse is where tremendous value can be added to the process. Since it’s often the very last buffer between you and your customers, its role in customer satisfaction can’t be overstated. The product should flow in, store, process, and flow out with a minimum of “touches” by human hands and processes. To get to that state, you have to break down the processes. What can be improved? What should be revamped? Do you know what the industry standards are? What are your competitors and peers measuring?
Typically, in broad terms, we’re discussing productivity, quality, errors, time, and costs. But the specific processes that feed these measures are what’s important.