Top 10 Logistics Metrics to Measure Supply Chain Efficiency in Your Warehouse
Tracking these logistics metrics can help you identify and tackle issues in your warehouse before they become a problem.
This guest post comes to us from Demetra Mallios at Catch-Up Logistics, a full-service provider of ambient and temperature-controlled food-grade distribution and warehousing services.
The supply chain plays an integral part in maintaining a well-functioning organization. A well-structured and organized warehouse will help you achieve your distribution goals and adequately analyze metrics.
You can think of it like when you are trying to decide what to make for dinner, but cannot remember what food you have in your fridge. If your items are organized and you are aware of what is in your fridge (the warehouse), then you can properly make your dinner decision (packing and preparing for delivery distribution).
While you may be aware of some metrics to track, you might still be missing others. But, that’s where we come in with our list of the top 10 logistics metrics to measure supply chain efficiency in your warehouse.
10 logistics metrics to measure supply chain efficiency in your warehouse
1. On-Time Shipping
A distribution center’s primary objective is clear in its name: It must accurately and efficiently distribute goods that are coming in and out of the warehouse. In other words, the correct product must be placed on the correct transportation method at the appropriate time. In order to complete this task, you must monitor late shipping departures to the warehouse and early completion of freight loading time.
Although it may seem that finishing shipment loads ahead of schedule is a good idea, in reality it could affect the departure and duties of other shipments. So, your business can be sure to monitor these shipment details via a 3PL system. You should also take into account the varying loading and transportation times needed to shift freights before out-bounding product. (Because delaying shipping can be just as bad as receiving the birthday present you ordered for your mom days later, timing matters.)
2. Warehouse Capacity
While there are measures out there to monitor inventory, it is essential that you complete manual observation as well. A distribution center needs to be aware of its ability to increase or decrease its loading times, create more storage space, and accurately track inventory. Currently, many distribution centers incorporate RFID measures to check inventory. However, you should not underestimate the need for manual observation in order to successfully analyze the listed criteria.
3. Accurate Order Fulfillment
Another highly important metric is, of course, the accuracy of the order picking processes. When your employee goes to retrieve a pallet of a specific product, you want to be able to measure how quickly and accurately that task is completed. However, realistically, human error will sometimes occur, which makes the tracking of the picking and moving process vital. A distribution center does not want to be in a situation in which it is unaware of lost, damaged, or misplaced product.
4. Properly Storing Incoming Product
This metric relates to the previous one about order fulfillment, in that it requires a similar tracking process. Accurate inbound storage is essential for accurate outbound deliveries. Without a well-organized inventory in the receiving end, the outbound end will have trouble accurately and efficiently fulfilling orders.
Additionally, the incoming product needs to be recorded correctly, so that inventory capacity can consistently be updated. Furthermore, incoming product and procedures can vary depending on the type of warehouse and storage facility you are operating. For instance, Catch-Up Logistics focuses on food storage. Therefore, it is essential that the product is placed in the correct freezer, cooler, or ambient temperature zone. If this is not done properly, not only will we ruin the product, but we will also lose credibility in our ability to provide high-quality warehousing services.
5. Peaks in Warehouse Capacity
Changes in product demand can, of course, influence the amount of inventory you are willing to hold in your warehouse distribution center. For instance, the holiday season will result in a peak in inventory, as companies need to store more seasonal product. With Catch-Up Logistics, Thanksgiving is a prime example, as our turkey inventory grows and distribution needs to be timely.
6. Total and Individual Cycle Times
In order to be sure that your warehouse is running efficiently, you should be tracking the cycle times. The total cycle time refers to the time needed to properly place the product in inventory from its time of arrival and then ship it from the distribution center. Individually, you can record the dock-to-load time, picking, packing, and preparing the freight for shipping times. This will enable you to see whether or not a certain process is underperforming and can be improved.
7. Damaged Products
You are bound to deal with damaged product at some point while either receiving inventory or moving it. Thus, it is important to record whether or not the product was already damaged upon arrival or if it was due to mishandling in the distribution center. Knowing this data and taking proper action to reduce such mishaps will help improve the efficiency of your warehouse.
8. Employee Turnover Rate
Because working in a distribution center can be exhausting, it is common for employees to search for other job opportunities. However, being able to minimize the turnover with incentives and an improved working environment can benefit the business. It is best to try and maintain employment, instead of consistently searching for new workers and spending the time and resources to train them, only to have them leave in a few months.
9. Accurate Tracking of Trailers
If your warehouse distribution center makes use of trailers for shipping product, it is essential that you are aware of their location at all times. (For instance, Catch-Up Logistics utilizes trailers for shipping.) A great method for tracking this information is through the use of a GPS tracking system.
10. Recording Temperatures
If you have a food storage warehouse facility, it is essential to install a temperature-monitoring system. At Catch-Up Logistics, we monitor the daily temperatures of all the freezers, coolers, and ambient temperature storage spaces to ensure the optimal temperature for proper food storage and health reasons. Additionally, such a system will notify you of any irregular changes in temperature so that you can immediately solve an arising problem before the food product becomes unusable.
There are many aspects to maintaining a well-functioning warehouse distribution system, as demonstrated from the list of metrics above. Although these tracking suggestions may at first appear excessive and time-consuming, they will help you improve the efficiency of your warehouse.
Being aware of potential issues will allow you to tackle the problem before it has a chance to further develop. So, what are you waiting for? If you have not already begun using these metrics, you should consider implementing them as soon as possible!