{"id":7310,"date":"2010-11-30T06:54:30","date_gmt":"2010-11-30T13:54:30","guid":{"rendered":"https:\/\/staging.opexlearning.com\/resources\/?p=7310"},"modified":"2014-09-26T12:27:37","modified_gmt":"2014-09-26T17:27:37","slug":"warehouse-management-metrics","status":"publish","type":"post","link":"https:\/\/staging.opexlearning.com\/resources\/warehouse-management-metrics\/7310\/","title":{"rendered":"Warehouse Management Metrics"},"content":{"rendered":"<div class=\"a296a24fa2fc69ef5487857f02f111e8\" data-index=\"9\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- Single Post readerboard -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:inline-block;width:728px;height:90px\"\r\n     data-ad-client=\"ca-pub-8207522353004717\"\r\n     data-ad-slot=\"1144967431\"><\/ins>\r\n<script>\r\n(adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>In a previous post on <a title=\"warehouse management processes\" href=\"https:\/\/staging.opexlearning.com\/resources\/warehouse-management-processes\/7300\/\">Fulfillment Operations<\/a>, I discussed the processes core to most Warehouse Operations. We also discussed <a title=\"center of gravity method to determine where to build a distribution center\" href=\"https:\/\/staging.opexlearning.com\/resources\/distribution-center-location-optimizing-your-logistics-network\/9312\/\">where you should build your warehouse<\/a>. In this post, I discuss &#8211; generally &#8211; the metrics associated with those processes.<\/p>\n<p>There are at least 3 critical items that allow you to reduce costs and increase service level in warehousing:<\/p>\n<ol>\n<li>Tight and Necessary <a title=\"what are your warehousing processes that are value add\" href=\"https:\/\/staging.opexlearning.com\/resources\/warehouse-management-processes\/7300\/\">Warehousing Processes<\/a><\/li>\n<li>What <a title=\"warehouse metrics help you measure your warehouse processes\" href=\"https:\/\/staging.opexlearning.com\/resources\/warehouse-management-metrics\/7310\/\">Warehouse Metrics<\/a> do you have in place to help you determine if your processes are going well or not.<\/li>\n<li>You <a title=\"where to locate your warehouse\" href=\"https:\/\/staging.opexlearning.com\/resources\/distribution-center-location-optimizing-your-logistics-network\/9312\/\">warehouse location<\/a> is optimal in the first place to meet service level commitments.<\/li>\n<li>These together will help you <a title=\"how to reduce costs in your warehouse\" href=\"https:\/\/staging.opexlearning.com\/resources\/warehouse-reduce-costs-increase-service-level\/10028\/\">reduce costs in your warehouse<\/a>.<\/li>\n<\/ol>\n<p>Previously, we discussed the major process paths common to most Distribution Centers such as: Purchasing, Receiving, Inventory Management, Order Management or Order Fulfillment, and Shipping. As with most business processes, there are metrics associated with those process paths. You know those massive <a title=\"distribution centers, amazon tour\" href=\"https:\/\/staging.opexlearning.com\/resources\/15-amazon-fulfillment-center-videos\/5520\/\">Amazon Distribution Centers<\/a>? Inside those are actually very complex processes that need to be measured.<\/p>\n<p>Here are just some:<\/p>\n<table class=\"tableizer-table\" border=\"1\">\n<tbody>\n<tr class=\"tableizer-firstrow\">\n<th>Metric<\/th>\n<th>Definition<\/th>\n<\/tr>\n<tr>\n<td>Gross Margin<\/td>\n<td>Revenue Minus Cost of Goods Sold<\/td>\n<\/tr>\n<tr>\n<td>Demand Forecast Accuracy<\/td>\n<td>Average Time from Receipt of Product to Payment<\/td>\n<\/tr>\n<tr>\n<td>Days Sales Outstanding<\/td>\n<td>Average Collection period from invoice to cash receipt<\/td>\n<\/tr>\n<tr>\n<td>Labor Productivity<\/td>\n<td>Total Units Handled \/ Total Labor Hours<\/td>\n<\/tr>\n<tr>\n<td>Cost\/Pick<\/td>\n<td>Line items pulled per month\/compensation &amp; benefits<\/td>\n<\/tr>\n<tr>\n<td>Payroll to Net Sales<\/td>\n<td>Compensation &amp; Benefits\/Revenue<\/td>\n<\/tr>\n<tr>\n<td>Cost of Goods Sold<\/td>\n<td>LIFO, FIFO, or Average<\/td>\n<\/tr>\n<tr>\n<td>Total Cost of Procurement<\/td>\n<td>Total impact on Cash Flow, COGS, Terms<\/td>\n<\/tr>\n<tr>\n<td>Supplier Quality<\/td>\n<td>% Defects = Lines Rejected\/Lines Received<\/td>\n<\/tr>\n<tr>\n<td>Lead Time<\/td>\n<td>Order-to-Receiving Time<\/td>\n<\/tr>\n<tr>\n<td>Transportation Cost<\/td>\n<td>[Inbound Freight Costs\/Sales] + [Outbound Freight Costs\/Sales] + [Liquidate Costs\/Sales]<\/td>\n<\/tr>\n<tr>\n<td>Receiving Accuracy<\/td>\n<td>% of Orders Received Accurately (count @ receiving, cycle count)<\/td>\n<\/tr>\n<tr>\n<td>Supplier on-time<\/td>\n<td>Purchase Order Receipt (PO) date-to-first receipt<\/td>\n<\/tr>\n<tr>\n<td>Inventory Turns<\/td>\n<td># times inventory gets soled and reordered within 12 months or 12 month rolling COGS (LIFO, FIFO, or Average) \/ Average Inventory<\/td>\n<\/tr>\n<tr>\n<td>Inventory Accuracy<\/td>\n<td>Actual versus Total &#8211; by Cycle Count<\/td>\n<\/tr>\n<tr>\n<td>Inventory On-Hand<\/td>\n<td># of Days Inventory Carried<\/td>\n<\/tr>\n<tr>\n<td>Warehouse Utilization (Pack Factor)<\/td>\n<td># of Bin Space Utilized \/ Total Available<\/td>\n<\/tr>\n<tr>\n<td>Perfect Order<\/td>\n<td>An order that is complete, accurate, on time by order by line item<\/td>\n<\/tr>\n<tr>\n<td>On-time Delivery<\/td>\n<td>First Customer Shipment to Expected Customer Date<\/td>\n<\/tr>\n<tr>\n<td>Adjustment Loss<\/td>\n<td>Over a rolling time period less X days, reconcile &#8220;missing inventory&#8221; with &#8220;found inventory&#8221; for both virtual items and physical items<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The list above is by no means an exhaustive list of Distribution Center metrics, but gives us a sense of the metrics associated with the process paths core to any Warehouse Operation.<\/p>\n<p>In the next post, we&#8217;ll discuss the success as it relates to the directional trajectory of the metrics.<\/p>\n<!--CusAds0-->\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>In a previous post on Fulfillment Operations, I discussed the processes core to most Warehouse Operations. We also discussed where you should build your warehouse. In this post, I discuss &#8211; generally &#8211; the metrics associated with those processes. There are at least 3 critical items that allow you to reduce costs and increase service [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":9886,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[508],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Order Fulfillment and Distribution Center Metrics<\/title>\n<meta name=\"description\" content=\"Metrics associated with fulfillment operations, distribution centers, 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