Measures of Efficiency in a Warehouse

Service levels:

• Percentage of orders dispatched on time;
• Percentage of orders fully satisfied (i.e. all order lines supplied);
• Accuracy of order fill;
• Stock availability in the warehouse;
• Order lead time;
• Returns and customer complaints.

Operational efficiency:

• Number of cases picked per person per hour;
• Number of order lines picked per person hour;
• Equipment uptime (e.g. percentage hours equipment available, with no breakdowns or routine maintenance).

Cost efficiency:

• Cost per case throughput;
• Cost per pallet stored;
• Conformance to budget (e.g. for staff costs, rent, equipment maintenance, packing materials).

Resource utilization:

• Percentage pallet storage capacity used;
• Number of hours per day equipment is used (e.g. sorters or narrow-aisle trucks) – although note that high utilizations may prevent peak throughputs being achieved, so these measures need to be interpreted with caution;
• Number of standard hours worked.

Stock integrity:

• Percentage of locations with correct stock (i.e. in accordance with the computer records, as measured during a physical stock-take);
• Percentage of SKUs with correct stock;
• Stock-turn (i.e. annual throughput/average inventory level). This figure is also often represented as the number of weeks of inventory held in the warehouse (i.e. a stock turn of 10 equals 52/10 or 5.2 weeks of inventory in the warehouse).

Cycle times:

• Average number of hours between arrival of goods on site and put away to storage location (i.e. available for replenishment or picking);
• Average number of hours between customer order receipt and dispatch of goods.

Safety:

• • Number of days without an accident;