33+ Warehouse Management KPIs To Track To Improve Performance

A warehouse operating at its best – where every order is fulfilled promptly, inventory is optimized, customers are satisfied, and the entire system works flawlessly. This utopian vision isn’t an unattainable dream. It’s a reality that can be sculpted using the power of data-driven insights, and that’s where warehouse management KPIs step onto the stage.

We often hear that “what gets measured, gets managed.” Well, it’s not just about warehouse management; it’s about taking control and steering towards excellence. Each KPI is a spotlight that reveals crucial aspects of your warehouse operations that might otherwise remain hidden in the shadows.

To guide you through this, we’ve put this article together. It is essentially a checklist of the most vital warehouse management KPIs to keep tabs on. Some KPIs we’ll look at might seem obvious while others will be less so. Ultimately, the goal is to provide a checklist of warehouse KPIs to measure benchmarks against. Here’s what we’ll cover are:

• Why you need to measure KPIs for your warehouse in the first place
• A lineup of 34 warehouse management KPIs sorted into 8 key categories

Why Measure Warehouse Management KPIs?

So why should you bother measuring key performance indicators for your warehouse? Here’s the lowdown in simple words:

 

Cost Control:

KPIs highlight areas where you might be bleeding unnecessary expenses.

ROI Evaluation:

With KPIs, you can see if your investments in warehouse management are paying off.

Risk Reduction:

KPIs flag red zones so you can prevent problems before they turn into a full-blown crisis.

Employee Accountability:

They make it clear who’s doing their job well and who might need a bit of help.

Сompetitive Edge:

Warehouse KPIs let you see where you are leading and where you are lagging compared to your competition.

Improving Efficiency:

They reveal where your warehouse operations might be slowing down. You can’t fix what you don’t know is broken.

Customer Satisfaction:

They help you track customer satisfaction by showing you if your warehouse is delivering orders on time and accurately.

Setting Targets:

Without a target, how do you know if you’re hitting the bullseye? KPIs let you set clear, achievable goals for your warehouse performance.

 

Management Visibility:

Bosses or warehouse managers can’t be everywhere at once. KPIs give managers a bird’s-eye view without needing to micromanage.

Continuous Improvement:

KPIs provide a yardstick to measure your progress over time. You can spot trends, learn from mistakes, and keep getting better.

Data-Driven Decisions:

They give you hard numbers to work with, not vague hunches. When you know the numbers, you can make decisions based on facts, not guesses.

34 Warehouse Management KPIs You Should Monitor To Improve Warehouse Operations

Here are 34 KPIs that will help you see right through the entire warehouse and make the management process more efficient.

Inventory Management KPIs

Let’s look at ways to calculate how efficiently you are managing your inventory.

01

Inventory Turnover Ratio

• How It’s Measured: Divide the Cost of Goods Sold (COGS) by the Average Inventory.
  • Inventory Turnover Ratio = COGS/Average Inventory
• What It Does: The inventory turnover rate shows you how often your inventory is sold and replaced within a specific period.
• How It Benefits: It helps you understand if you’re stocking too much or too little. A higher turnover ratio generally indicates efficient operations while a lower ratio might signal overstocking.

02

Inventory To Sales Ratio

• How It’s Measured: Divide the Average Inventory Value by Net Sales.
  • Inventory To Sales Ratio = Average Inventory Value/Net Sales
• What It Does: This KPI tells you the inventory proportion you’re holding concerning your sales.
• How It Benefits: It’s a gauge of your inventory health. A high ratio could mean you are tying up capital in inventory while a low ratio might indicate stockouts affecting potential sales.

03

Carrying Cost Of Inventory

• How It’s Measured: Sum up all costs linked to holding inventory (storage, insurance, handling) and divide it by the Average Inventory Value.
  • Carrying Cost Of Inventory = Inventory Holding Cost/Average Inventory Value
• What It Does: Inventory carrying cost gives you the price tag of keeping physical inventory in the warehouse.
• How It Benefits: The longer stock stays in storage, the higher the cost to the warehouse. That’s because carrying costs are essentially a running tally of an inventory item’s portion of capital and service costs, including equipment, overhead, and taxes.

04

Inventory Shrinkage

• How It’s Measured: Divide the value of lost inventory due to theft, damage, or errors by the Average Inventory Value.
  • Inventory Shrinkage = Lost Inventory Value/Average Inventory Value
• What It Does: This KPI tracks the amount of excess inventory listed in the part count records versus actual inventory that’s under the roof. In other words, inventory may show up on a computer screen but not actually be in the facility.
• How It Benefits: Lower shrinkage means tighter security and more accurate stock levels.

05

Inventory Accuracy

• How It’s Measured: Divide the count of accurately recorded items by the total count of items on record and multiply by 100.
  • Inventory Accuracy = (No. of Accurately Recorded Items/No. of Items On Record) X 100
• What It Does: This KPI shows how accurate your recorded inventory is compared to the actual count.
• How It Benefits: Accurate records prevent stockouts and errors, boosting customer satisfaction and efficiency.

Order Management & Fulfillment KPIs

Let’s discuss how you can measure the order processing team’s productivity to increase efficiency and improve workflows.

 
06

Order Fill Rate

• How It’s Measured: Divide the number of complete orders shipped by the total number of orders received and multiply by 100.
  • Order Fill Rate = (No. of Complete Orders Shipped/ No.of Orders Received) X 100
• What It Does: It tells you the percentage of orders that were fulfilled completely from available inventory.
• How It Benefits: A high fill rate means happy customers while a low rate can disappoint and cause potential losses.

07

On-Time Delivery

• How It’s Measured: Divide the number of orders delivered on time by the total number of orders shipped and multiply by 100.
  • On-Time Delivery = (No. of Orders Delivered On Time/ No. of Orders Shipped) X 100
• What It Does: This KPI measures the proportion of orders that were delivered to customers within the promised timeframe.
• How It Benefits: It’s your reliability tracker. High on-time delivery means you’re building trust with customers.

08

Order Cycle Time

• How It’s Measured: Calculate the average time it takes for an order to be processed – from order placement to delivery.
• What It Does: It reflects the efficiency of your order processing and fulfillment.
• How It Benefits: A shorter cycle time means quicker deliveries and happier customers. A longer cycle time points to inefficiencies in your supply chain.

09

Perfect Order Rate

• How It’s Measured: Divide the number of orders that meet all customer requirements by the total number of orders and multiply by 100.
  • Perfect Order Rate = (Perfect Orders/Total Orders) X 100
• What It Does: This warehouse KPI indicates the percentage of error-free orders and meets all customer expectations.
• How It Benefits: Higher perfect order rates mean fewer returns, fewer customer complaints, and smoother operations.

10

Order Picking Accuracy

• How It’s Measured: Divide the number of accurately picked items by the total number of items picked and multiply by 100.
  • Order Picking Accuracy = (No. of Accurately Picked Items / No. of Total Items Picked) X 100
• What It Does: It shows how often your warehouse staff selects the correct items for orders.
• How It Benefits: It’s your precision tracker. Higher accuracy means fewer wrong shipments, fewer returns, and happier customers.

11

Backorder Rate

• How It’s Measured: Divide the number of back-ordered items by the total number of ordered items and multiply by 100.
  • Backorder Rate = (Back-ordered Items/Total Ordered Items) X 100
• What It Does: This KPI shows the percentage of items that couldn’t be fulfilled from current inventory and need to be reordered.
• How It Benefits: It is a demand-meets-supply meter. A high backorder rate indicates issues with inventory planning while a low rate signals smoother operations.

12

Order Lead Time

• How It’s Measured: Calculate the average time it takes for an order to be fulfilled and shipped after it’s placed.
• What It Does: This KPI measures the time from the customer’s click to the package hitting the road.
• How It Benefits: Shorter lead times mean quicker customer satisfaction and potentially more sales. Longer lead times warrant a closer look at your warehouse processes.

13

Return Rate

• How It’s Measured: Divide the total number of rejected or returned products by the total number of products sold and multiply by 100.
  • Return Rate = (Returned Products/Total number of Products Sold) X 100
• What It Does: It indicates the percentage of items that customers send back because of defects, wrong items, or dissatisfaction.
• How It Benefits: When you understand the reject rate, it can help you perform a root-cause analysis. It’s typically better to catch a problem early before letting it escalate into something catastrophic.

Putaway KPIs

Here’s how you can measure the efficiency of your operations when goods arrive at your doorstep.

14

Putaway Time

• How It’s Measured: Measure the time it takes from receiving an item to placing it in its designated storage location.
• What It Does: This KPI tracks how efficiently your team can stow items after they arrive at the warehouse.
• How It Benefits: Faster putaway times mean quicker access to inventory and more streamlined warehouse productivity.

15

Putaway Accuracy

• How It’s Measured: Divide the number of items accurately placed in the right storage location by the total number of items put away and multiply by 100.
  • Putaway Accuracy = (Accurately Place Items/Total Putaway Item) X 100
• What It Does: It shows how often items are stored correctly in their designated spots upon arrival.
• How It Benefits: Higher accuracy means less time spent searching for items later which boosts warehouse efficiency and prevents errors.

16

Putaway Cost Per Unit

• How It’s Measured: Divide the total putaway costs by the total number of units put away.
  • Putaway Cost Per Unit = Total Putaway Costs/Total Putaway Units
• What It Does: This KPI evaluates the cost of stowing each unit of inventory.
• How It Benefits: Lower costs mean you are using resources more efficiently. Also, it can help you make smarter decisions about storage strategies.

Receiving KPIs

Let’s take a look at how you can track your receiving operations’ efficiency.

 
17

Receiving Time

• How It’s Measured: Calculate the time it takes to unload, inspect, and document the receipt of incoming items.
• What It Does: It measures how efficiently your team processes newly arrived inventory.
• How It Benefits: Faster receiving times mean quicker access to stock which can translate to better warehouse productivity.

18

Dock-To-Stock Cycle Time

• How It’s Measured: Calculate the time it takes from a truck’s arrival at the dock to the inventory being available for storage.
• What It Does: This KPI tracks the efficiency of getting items from the loading dock to storage shelves.
• How It Benefits: Shorter cycle times mean less time spent in limbo, optimizing warehouse operations and freeing up space.

19

Receiving Accuracy

• How It’s Measured: Divide the number of accurately received items by the total number of items received and multiply by 100.
  • Receiving Accuracy = (Accurately Received Items/Total Recieve Items) X 100
• What It Does: This KPI indicates how often items are received without discrepancies or errors.
• How It Benefits: Higher accuracy means fewer disruptions downstream, accurate inventory records, and a smoother flow of goods.

Yard Operations KPIs

Let’s discuss different KPIs that you can use to get a complete view of your entire yard operations – from appointment booking to check out.

 
20

Check-In Versus Appointment Times

• How It’s Measured: Calculate the difference between the actual check-in time of a truck and its scheduled appointment time.
• What It Does: This KPI tracks how closely trucks adhere to their appointed arrival times.
• How It Benefits: Tracking this time differential can identify a lack of efficiency. If missed appointments are trending, that’s a leading indicator that there are bottlenecks to identify and resolve.

21

Time From Check-In To Door Assignment

• How It’s Measured: Measure the time it takes from a truck’s check-in to being assigned a loading/unloading door.
• What It Does: It reflects how efficiently trucks are assigned to their designated areas.
• How It Benefits: Faster door assignments mean trucks spend less time waiting which results in smoother operations and improved overall yard efficiency.

22

Door Assignment To Trailer Seal

• How It’s Measured: Measure the time it takes from a truck receiving its door assignment to the trailer being sealed.
• What It Does: This KPI tracks the speed at which trucks are loaded/unloaded and prepared for departure.
• How It Benefits: If the freight isn’t packed and pallets aren’t staged ahead of time, this number will increase.

23

Trailer Seal To Checkout

• How It’s Measured: Calculate the time it takes from when the trailer is sealed to completing the checkout process.
• What It Does: It measures the time it takes for a truck to finish all necessary procedures and leave the yard.
• How It Benefits: If your facility is bottlenecked at checkout, it may indicate that you need to investigate contactless freight.

24

Dwell Times

• How It’s Measured: Calculate the time a truck spends within the yard, from check-in to checkout.
• What It Does: This KPI measures how long it takes to get drivers in and out of your facility.
• How It Benefits: Identifying swollen dwell times can help identify bottlenecks to improve efficiency and avoid costly fees.

25

Detention Paid Versus Total Number Of Trucks

• How It’s Measured: Divide the total number of trucks for which detention fees were paid by the total number of trucks in the yard.
  • Detention Paid Vs. Total Number Of Trucks = No. of Trucks that Paid Detention Fee/Total No. of Trucks
• What It Does: It reveals the proportion of trucks that incurred detention fees due to extended wait times.
• How It Benefits: Detention fee payments are a significant warning sign of an inefficient operation. The trend lines in detention fee payments are a leading indicator of the overall costs incurred.

Vector’s yard management system (YMS) is a solution that not only helps you hit your KPI targets but also boosts your yard’s efficiency. From the moment a truck checks in to the second it’s assigned a door, and everything in between – you have complete control.

Vector’s intelligent scheduling and appointment management ensure that your yard efficiently manages appointments to reduce congestion and boost punctuality. The result? A smoother rhythm in your operations and happier carriers. Trucks are assigned to loading and unloading doors with precision, slashing the time from check-in to door assignment and improving your overall truck turnaround time.

At Vector, we designed our YMS to optimize truck movements, streamline loading and unloading processes, and reduce unnecessary waiting periods to help you minimize dwell times. As a result, your yard’s efficiency improves and you can better utilize your resources to meet customer demands more effectively.

Our YMS generates precise, detailed reports on yard operations and KPIs. These reports let you identify areas for improvement, fine-tune processes, and make data-driven decisions that elevate your yard’s overall performance.

Vector’s YMS seamlessly integrates with other vital systems like a warehouse management system (WMS), transportation management system (TMS), and enterprise resource planning (ERP) systems. This means you get a cohesive and synchronized approach across your operations, bringing you more control and efficiency.

Storage Utilization KPIs

It’s time to explore ways to calculate how efficiently you are handling storage in your warehouse.

26

Storage Space Utilization

• How It’s Measured: Calculate the ratio of used storage space to total available space and multiply by 100.
  • Storage Space Utilization = (Used Storage Space/Total Storage Space) X 100
• What It Does: This KPI shows how effectively your warehouse is using its available storage area.
• How It Benefits: Higher utilization means you’re squeezing more value out of your warehouse which can save costs and improve efficiency.

27

Storage Density

• How It’s Measured: Divide the total number of items stored by the total storage area in square feet.
  • Storage Utilization = Total No. Of Items Stored/Total Storage Area
• What It Does: It measures how densely your warehouse is packed with inventory.
• How It Benefits: Higher density shows that you are making the most of your space but be careful not to sacrifice accessibility.

28

Space Fill Rate

• How It’s Measured: Divide the total volume of stored items by the total volume of available storage space and multiply by 100.
  • Space Fill Rate = (Total Volume Of Stored Items/Volume Of Available Storage Space) X100
• What It Does: This KPI tells you how efficiently your warehouse’s storage capacity is utilized.
• How It Benefits: A higher fill rate means you are getting the most bang for your square footage but it’s important to maintain accessibility for smooth operations.

Warehouse Safety KPIs

Let’s look at safety KPIs that will help you keep your inventory management system safe and your workforce protected.

29

Lost Time Injury Frequency Rate (LTIFR)

• How It’s Measured: Multiply the number of lost-time injuries by 1,000,000 and divide them by the total number of hours worked.
  • LTIFR = (Lost-Time Injuries X 1,000,000)/Total Hours Worked
• What It Does: This provides a quantification of costs related to injuries sustained on the job.
• How It Benefits: No one wants to deal with an injury, and no one wants to know their OSHA Tracking this KPI will help you quantify the cost of improving safety measures to avoid injuries in the first place.

30

Near-Miss Incidents

• How It’s Measured: Count the number of near-miss incidents reported in the warehouse.
• What It Does: This KPI tracks incidents that almost resulted in injuries or accidents but were narrowly avoided.
• How It Benefits: Tracking near-miss incidents helps prevent future accidents by identifying potential hazards before they escalate.

31

Safety Compliance Rate

• How It’s Measured: Divide the number of safety policy compliance instances by the total number of opportunities and multiply by 100.
  • Safety Compliance Rate = (Safety Compliance Instances/Total Number of Opportunities) X 100
• What It Does: It measures how consistently safety policies and procedures are followed.
• How It Benefits: Higher compliance rates mean a safer work environment and fewer risks for injuries.

Environmental Sustainability KPIs

Measuring these KPIs will steer your warehouse towards more responsible practices.

32

Energy Consumption Per Unit

• How It’s Measured: Divide the total energy consumption by the total number of units produced or processed.
  • Energy Consumption Per Unit = Total Energy Consumption/Total No. Of Units Produced
• What It Does: This KPI measures how efficiently energy is used to produce each unit of output.
• How It Benefits: Lower consumption per unit means a greener warehouse, reduced costs, and a more sustainable inventory management system.

33

Carbon Emissions Per Shipped Unit

• How It’s Measured: Calculate the total carbon emissions produced by your operations and divide it by the number of units shipped.
  • Carbon Emissions Per Shipped Unit = Total Carbin Emissions/Total Units Shipped
• What It Does: It measures the amount of carbon emissions generated for each unit of product shipped.
• How It Benefits: Lower emissions per unit shipped mean a greener supply chain, reduced environmental impact, and a more sustainable approach to logistics.

34

Waste Recycling Rate

• How It’s Measured: Divide the amount of recycled waste by the total waste generated and multiply by 100.
  • Waste Recycling Rate = (Recycled Waste/Total Waste Generated) X 100
• What It Does: This KPI indicates the proportion of waste that is recycled rather than disposed of.
• How It Benefits: A higher recycling rate means less waste ending up in landfills, contributing to a cleaner environment.

Conclusion

Not every KPI is going to provide endless “aha” moments. We’re surrounded by a sea of data, and there are so many KPIs that we can get lost at sea. But have faith and you’ll learn things about your business and the industry you never could have imagined. Remember, it’s a journey, not a destination—enjoy it.

By all means, cherry-pick the most important warehouse management KPIs for your business. But we also encourage you to track a few that don’t appear obvious at first glance. Stay curious. Give a KPI 3 to 12 months to gather steam. If it’s junk, chuck it. But then again, you might be surprised by what insights and competitive advantage you get from one of the KPIs we covered today.

Vector’s YMS is your ticket to revolutionize how you manage your yard, optimize KPIs, and transform your operations into a masterpiece. It is as unique as your yard. It’s customizable, tailored to your challenges and goals, ensuring you get precisely what you need to conquer your yard management challenges.

Ready to see Vector’s yard management system in action? Book a demo today!

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.