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The one must-have metric for warehouse operations

The one must-have metric for warehouse operations

There are various ways to assess the success of a warehouse: business metrics, performance evaluations, and analysis of financial accounts. Creating warehouse management metrics is another parameter that assesses the efficiency of your procedures. Each warehouse metric examines a particular operation and provides insights into how well that process performs.

Most warehouse management metrics for supply chain network modelling are universal. To achieve your company objectives, you might have to employ only a few of them. You can narrow down your choices to the ones that you believe are most pertinent to your current objectives.

This post will cover the frequently used warehouse metrics along with their benefits. But before that, you need to understand metrics and their types.

       What are metrics?

Metrics are assessments of the general health of a firm. They are crucial and reliable indicators of its progress. Some are vanity metrics that only give a positive feeling but have no practical use, like the number of likes on a post on social media.

Metrics for supply chain network optimization models offer helpful information about a company. You can take a professional course and achieve the supply chain professional certification. It will prepare you for challenging and rewarding roles in warehouse operations and supply chain network modelling. The knowledge will help you implement the most-needed metrics for your company.

       Which metric should you choose for warehouse operations?

There are five major areas where metrics are used to measure warehouse operations. You can choose one according to the operations.

General Metrics

Some broad indicators that are tracked are not related to any specific warehouse. Still, they provide valuable information regarding how the facility operates (or what changes should be made). This metric includes the following parameters:

       Carrying cost of inventory

       Rate of order returns

       Rate of backorders

       Lead time of orders

       Cost of transportation per package

       Per employee revenue

Receiving Metrics

These metrics are frequently neglected. All warehouse processes proceed downstream from receiving. So, if you have difficulties here, they will cascade down to the remainder of the processes.

This metric takes care of these parameters:

       Accuracy of orders

       Damage to orders

       Receiving cycle time

Storage or Inventory Metrics

In a warehouse, storage may appear to be a very insignificant task since all items are always on the shelves or pallets. However, making decisions on purchases requires precise knowledge of what is present on the shelves and how long it has been there.

There are numerous variables to evaluate:

       Turnover of the inventory

       Sales-to-inventory ratio

       Total cost of storage

Picking Metrics

Unbelievably, order selection is one of the most difficult tasks at a warehouse. Picking accuracy may make or break the customer experience because the picking speed frequently dictates how quickly consumers receive their orders.

For those reasons, here are a few measures you ought to pay special attention to:

       Accuracy of picking

       Number of orders picked per hour or picking productivity

       Time of order cycles

       Efficiency of picking

       Cost per line the item has been picked

Packing and Shipping Metrics

Packaging is a labor-intensive task and has an impact on customer satisfaction. Timely shipping and delivery of products are also important.

The packing and shipping metrics are as follows:

       Costs of packing items

       On-time full delivery percentage

       Average days for late

Enrolling in a professional certification course in the supply chain will give you a unique perspective on these metrics. It will help you draft ideas to improve the growth of warehouse operations.

       How to select the one must-have metric for warehouse operations?

Here, the question might arise, which of the criteria listed above is the most crucial? It depends entirely on where you think your warehouse may perform better and what you need to demonstrate to the management. For example, tracking pick accuracy and the number of things picked per hour can be more crucial if you are using a warehouse inventory management system. Similarly, you need to get a hold of your rate of return and the overall order cycle time if you are just getting started.

The easy-to-track metrics for supply chain network design models are also significant. As a warehouse manager, you must measure the backorder rates and inventory turnover that are often logged automatically with management software. You also need to align your sales, orders, and sales-to-inventory ratio.


Obtaining metrics for a network optimisation model in supply chain management may prove challenging if your warehouse management program lacks them or you don't know how to use them. A professional course in logistics and supply chain management will help you tackle such hurdles in operations and make you a preferable candidate for warehouse management jobs.

To know more: https://executive.timespro.com/course/operations-and-supply-chain/iim-tiruchirappalli-post-graduate-certificate-programme-in-supply-chain-management/

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