Warehouse KPIs and Continuous Improvement

The old adage here is "you cannot improve what you don't measure", this is so true, obviously how do you measure your performance if you dont know where your at or how your performing.

KPIs for warehouse can be based on the three top principles, QUALITY - SPEED - COST, or QUALITY - COST - SPEED

A simple measure for QUALITY can simply be order pick accuracy, this is fairly easily measured by how many orders have been despatched Vs how many customer complaints (credits, returns) were received for the same period. Always use actual orders despatched, not line items despatched, if one line of a customer 100 line order is wrong, the order is wrong not just 1 line.

For SPEED, this can be orders per hour, per day or per week, have the orders all been despatched within the agreed delivery timeframe, ie. 24 hours

COST, this can be based on hours worked x hourly rate x no. of team members - there is a link here between all three measures.

Simple right? the trick here is to have the team report on the KPI chart how their department has tracked - green for on target - red for a miss.

This can and should be tracked over a period using a monthly plot to show the trend.

The last catch with this KPI reporting is to not simply move on after missing target, the team need to report on the KPI chart - what happened to cause this result (miss), and what the team are going to do (implement) to prevent this happening again in the future.

This is all now about CONTINUOUS IMPROVEMENT....