What is Warehouse Management

Warehouse management is about planning each element of the warehouse to ensure it
is managed to a high standard but it’s the content of the plan that counts and can really
make a difference.

Co-ordinating each element of the warehouse is crucial to ensure all aspects are taken
into consideration to ensure efficiencies and overall performance is monitored.

Setting out Key Performance Indicator’s (KPI’s) for the warehouse is important but
monitoring performance is equally important and is key to understand how the
operation is performing.

This blog will go through the following points on setting KPIs for your business that can
result on having a really positive input!

Benefits of setting out KPIs

Ideas on setting out KPIs

What are the benefits of KPI tracking

How to increase employee engagement

Close the learning gaps

Help make informed decisions

How to detect patterns

Benefits of setting out KPI’s

KPIs should involve strategic measures, operational, employee performance, cost or
financial indicators just to name a few. Whenever you want to quantify data within
your company, setting a KPI to measure it, is a smart way to compare results as well as
evaluating business performance.

What you do with the data is also important as it can allow you to make the correct and
informed decisions for further improvements to benefit the business.

Ideas on setting out KPIs for the warehouse

KPIs are important because they allow you to align the business to achieve your
strategic goals for sales, growth, profit, processes and people. Remember the numbers
don’t lie once you quantify your KPIs, they provide you valuable feedback on your
business performance.

KPIs revolve around determining how smoothly each of the objectives set out are
performing.

You decide on what needs focus and set a measurement against each one to then be
monitored.

Here’s some ideas below to get you thinking!

• Picking accuracy
• Total order cycle time
• Order lead time
• Customer queries
• Backorder rate
• fulfilment accuracy rate
• On-time shipping rate
• Cost per order
• Rate of returns

What are the Benefits of KPI Tracking?

The benefits of KPIs go way beyond only tracking and monitoring revenue figures.
One of the biggest things it can influence is your employees and we all know the
better the calibre of operators you have in your business, the more likely you are to
succeed.

Here’s is how your business can benefit from tracking KPIs:

Increases Employee Engagement

Companies usually struggle with employee engagement, which can directly influence
your business and overall growth.

KPIs can provide a helpful tool in measuring performance directly linked to employee
engagement. There are numerous ways of doing this but one of the best mechanisms is
doing an Employee Opinion Survey (EOS) this allows the team to give valuable
feedback on the workplace and gives you an indication on how they’re generally feeling
overall as a team.

Utilise the feedback to make changes that provide an engaged workforce that sees
higher customer engagement as well as improved profitability.

KPIs can also be linked to individual incentives (monthly bonuses) or team building
events as a thank you for their hard work. This way, you can encourage and empower
the employees to exceed their targets on a more regular basis.  

Close the learning gaps

Data will often highlight if an individual or a department isn’t performing effectively as
the KPI you set out will highlight if an individual is not hitting their set target, then this
may indicate that they need further training or support. On the other hand, if they are
trained then it will highlight that it could be more of a conduct issue with the individual.
Either way, it’s important to recognise this quickly then manage the situation in which
way you see fit to improve the situation as it could be having a detrimental affect on
your business.

Help make informed decisions

As well as setting out the right KPIs for your business it important to use them to make
informed decisions based on how they’re performing. It can also be tempting to scrap
certain KPIs because they aren’t telling the full story. However, getting it right first can
save time and rapidly increase performance, so it’s imperative you get this part right
first time around.

A single KPI can be the trigger that a decision needs to be made, but to make the most
informed decision, it is best to consider other metrics before doing so to things, such as
the time of year and set patterns to do with trends.

How to detect patterns

Data will provide evidence of trends over time, so this gives you the opportunity to
spot patterns within your business. Or better still it may allow you to predict what may
happen before it does so preventable action can be taken next time.

For instance, if you know historically that you get less engagement on your social
media channels during the summer months, you could plan a social media campaign to
ensure engagement doesn’t drop. Alternatively, you could use this downtime to do
research or training in social media to avoid this happening in the future.

Final Summary

It’s always worth remembering that having data is one thing and what you do with it is
another. How you translate the data into successful actions is what will make the
difference. Such as setting smart objectives that will really have a positive impact on
your business should be at the forefront of your business.

Knowing where to abstract the relevant data is an important step in the right direction.
Whether the end goal is to reduce the costs or growing revenues, it could even be both,
figuring out how to transform the knowledge from the data to drive business insights is
the key component in driving your business forward.