Key Performance Indicators

Each organization has its own key performance indicators (KPI) with which they measure their success or area of needing improvement. It is an essential aspect of running a business. What key indicators should you use for your warehouse business? That will depend upon what is most important to your organization and applies to your industry.

Key performance metrics indicates your warehouse organization’s health. It must be quantifiable, and there must be a visual representation, which can be either color-coded or in graphic form. The best method of measure is numerical rather than a general improvement. An example would be a percentage of deliveries or returns due to poor quality control. The measurements must take into consideration current market trends within measured industry performance.

A warehouse management system will do wonders in assisting you to track performance within your organization. Areas of measures include the automated entry and approval function, on-demand and real time measures, data input and real time performance, and set up procedures. Other areas of performance can include order accuracy, product availability, inventory accuracy, and product quality.

Overall, the KPI should be actionable by the company. It is useless to track and try to modify a performance indicator such as economic trends because your organization cannot change outside forces. It is best to target an area in which you want growth. An effective KPI leads to increased profitability, adds value, and efficiency if used consistently over the long-term.