3 essential KPIs for warehousing companies

Inventories are well piled up on warehouse racks

Companies handling warehousing and fulfillment have been uniquely challenged in the wake of COVID-19.

While many others across the world are working remotely, warehouses and other supply chain companies have to maintain high levels of efficiency.

Especially when processing high-demand products like sanitation products and tech equipment, it’s important for warehousing companies to be accurate and effective now more than ever. However, it’s also crucial to ensure that you don’t overwhelm your employees with too many KPIs.

This article will highlight 3 KPIs that can serve as a foundation for success within your warehousing operations.

Inventory accuracy

Inventory accuracy is the first step to making sure that your business is able to forecast inventory needs.

If you’re unable to accurately measure your inventory, there’s a chance that you won’t have the resources to fulfill the orders that your customers’ place. That means that you’ll be wasting both time and money by not monitoring your inventory effectively.

Fortunately, there are several ways to measure and track this KPI to achieve 100% inventory accuracy, meaning that you have as much inventory as your records show. Your business can adopt either a technical or manual, process-driven method to accurately measure inventory and make your internal operations more predictable.

For those wishing to implement a technical solution, a warehouse management system (WMS) may be the answer to inventory accuracy tracking. The software will help you locate and manage inventory digitally.

These systems range complexity and functionality, so make sure to properly research your options before investing. Additionally, part of your implementation plan should include assigning someone to monitor the technology.

The software won’t do much good without being frequently checked, so inventory can be accounted for. Selecting a manager for your company’s WMS will keep your inventory tracking seamless.

For companies not wanting to go digital, you can still accurately account for inventory manually. However, you must enact a strict, process-driven system for counting inventory.

Put inventory checks on your company calendar and schedule them in a consistent cadence. Creating a regular inventory schedule will manage your employees’ expectations.

In addition to your inventory schedule, it’ll also be important to have a consistent process for taking inventory. This will also help your team grow familiar with a process and make them more likely to maintain accuracy.

Regardless of how you choose to measure inventory, it’s essential to find a process that works for you and stick to it. A system that boasts consistency, predictability, and accuracy will drive you toward 100% inventory accuracy.

Dock to stock

The dock to stock metric showcases how efficiently your business operates.

Dock to stock is the time it takes for new freight arrivals to be properly logged within your system, checked for damage, and physically stocked. A high dock to stock time indicates an inefficiency somewhere within that process.

Time inefficiencies in this area can cause extreme operational lag. For instance, Supply & Demand Chain Executive finds that there’s about a 44-hour difference between the top and bottom dock to stock performers.

Source: Supply & Demand Chain Executive


Based on this data, a company taking two days to properly account for freight has the potential to reduce their time to about four hours. Of course, this assumes a targeted approach to streamlining your dock to stock metric.

The most effective way to achieve a low dock to stock time is to reevaluate your current process for intaking freight. Ideally, your system should be streamlined with few touchpoints. Taking time to eliminate any unnecessary inventory movement and adjustments will increase your speed.

This will take some strategic planning, and possibly a few major changes within your current processing system. However, the net time and revenue earned by making adjustments to streamline this process will be well worth the effort of modifying your operations.

It may also prove helpful to implement a scanning system that digitally (and pretty much automatically) inputs inventory into your system. Instead of tracking this information on paper with the concern of inaccurate or lost data, you’ll be able to rest assured that your freight has been accounted for.

The dock to stock KPI is essential to ensuring an efficient warehousing operation and can easily be tracked and improved upon for those looking for a productivity boost.

Order accuracy

Order accuracy is arguably the most important warehousing KPI to track. It encapsulates the core aim of the business: to deliver the correct order reliability.

Because of order accuracy’s fundamental importance to the warehousing industry, it’s advisable to aim for 100% order accuracy.

If this metric dips too low, it means that customers are not receiving what they’re counting on your business for. That means that a low order accuracy rate can put your customer satisfaction and retention at risk.

Additionally, delivering the incorrect orders to customers almost always leads to a return of the product. This catalyzes a lengthy process for you as the warehousing business.

Your team must take the freight back into your inventory, account for it in your internal systems, issue a refund, and correct the order. Order accuracy issues can trigger massive time and cost inefficiencies this way.

The key to avoiding these mistakes and being 100% accurate with orders is an organized, structured process.

For companies with a WMS in place, SKUs can assist in organizing your order fulfillment process.

Source: Shopify


The SKU shown above can be used internally to organize and track the individual products that you’re holding in inventory. Organized by product traits, the code will assist you in keeping tabs on your inventory.

This way, your inventory will be organized and accounted for. When fulfilling orders, there should be no surprises because of the documentation that SKUs provide.

Implementing a structured, systematic SKU system is one of several ways to increase your order accuracy rate.

Track warehousing KPIs that address your business needs

At their most effective, KPIs reflect the main goals and objectives of a business. To make sure your warehousing company is performing at its most efficient and effective, evaluate your current positioning toward your goals.

Then, consider implementing KPIs for order accuracy, dock to stock, and inventory accuracy. Afterward, make sure to continue to track these KPIs on a regular basis to track your progress.

Sydney Wess is a content editor for Clutch, writing about supply chain topics.

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