Data is the cornerstone of getting a true snapshot of not only how well
your distribution center is operating, but also the impression your company is
leaving with customers.
However, in order to build toward the answers companies seek, they must
start by laying that cornerstone and begin collecting data. Doing so brings a
host of questions, including: What data is meaningful and what is just data?
How often should we collect the information? What are acceptable numbers and
what numbers are indicators of problems in need corrective actions? What do I
do with this data to improve processes? All are important questions to ask and
the answers may vary by company.
Below are a few important key performance indicators (KPIs) that can
help companies get an idea of how their distribution centers are operating.
Shipping accuracy. Arguably
one of the most important KPIs, shipping accuracy tracks that the shipment
arrives at the destination exactly the way it was released, with the correct
item and the correct quantity
Total damage compared to on-hand
inventory. Simply, the amount of damage caused in the distribution center
compared to the total on-hand inventory.
Inventory accuracy. How
accurately is inventory managed? This KPI will review each inventory unit and
check that it is in the correct location, has the correct count, and is the
correct item compared to information in the warehouse management system.
On-time shipments. This is
defined by each shipment leaving the distribution center at or before the
scheduled appointment time.
Safety. Many operations will
hold a standard of OSHA recordable injuries in a calendar year. While the goal
of this KPI always will be zero, each company will set a standard based on past
history.
Remember, while these are internal KPIs, each has an impact on how customers view your company.
Remember, while these are internal KPIs, each has an impact on how customers view your company.
