Your business is thriving and your warehouse is busy - your processes must be working, right? But how do you know? How do you know if you’re operating efficiently and can scale with ease, or if your processes are at their limits and any further growth will tip you over the edge?
The answer is easier than you might think. By identifying and then tracking key performance indicators you can keep an eye on how you are doing and spot potential issues before they arise.
But what should you track? What is the most important thing? How many things do you need to track? Ask different people and you will get different views, and to some extent this will depend on your specific operation, but the following areas consistently appear near the top of most people’s lists and are worth considering:
Vendor / supplier performance
The reliability of your suppliers is critical. Do they deliver exactly what you ordered and is it on time? Do you get many damaged items? Are some suppliers performing better than others?
How long does it take to get products from your goods-in area to locations in your pick face? If you have items stacked in the goods-in area waiting to be put away these are potential sales you could be losing, and any increases in demand could make your goods-in area a real bottleneck. The sooner you know about this the sooner you can rectify it.
You don’t want to waste pick operators’ time or risk missing shipping deadlines waiting for items to be replenished from bulk to pick locations. Keeping a close eye on what stock is where in your warehouse is vital for this and also for making sure there is enough of each product on hand to satisfy orders or that re-orders and backorders can keep up with demand.
Monitoring user activity rates can highlight areas of inefficiency which can then be investigated to determine the cause; maybe there are issues with the location of particular products, maybe pickers need to wait for equipment, or perhaps some operators need more training. It can also uncover peaks and troughs in your operations - a great help when planning your staffing.
Pick, pack and despatch
There is a lot going on here, and a lot that could be measured. Some examples are:
- Number of items / orders picked per hour in total or by user
- Number of items / orders despatched per hour in total or by user
As with user activity monitoring, this can highlight potential bottlenecks together with operational peaks and troughs.
Shipping what the customer ordered and delivering it on time is key to customer satisfaction. As volumes increase the pressure mounts and you don’t want negative reviews or an increase in returns. Keeping track of your error rates will let you investigate the causes and take remedial action before the situation becomes severe.
So how should you measure and track these and any other KPIs that you identify?
This really depends on your internal processes and which systems you are using. E-commerce, Enterprise Resource Planning (ERP) and Warehouse Management Systems (WMS) will usually offer system reports which can show some or all of these metrics, or allow for export of data to be manipulated via spreadsheets or imported into other systems.
Additionally, some systems, such as the Peoplevox WMS, provide dashboards which display regularly updated key metrics. These can be monitored by managers on their screens, or even displayed on large screens in the warehouse so everyone can see how the warehouse is performing at that moment and how each day is progressing. Powerful stuff!
If you are interested to learn how the Peoplevox WMS could help you track your KPIs, get in touch and we can show you how Peoplevox does it.