How to measure your warehouse man ...

Warehouse Management Services

One important part of your delivery services is optimising your warehouse management. The best way to do this is to regularly check that your warehouse processes are performing as well as they should be and highlight any areas that can be improved. If you’re not sure where to begin, here are some starting points to measure your warehouse management performance:

Inventory turnover and carrying cost

Costs associated with your inventory includes overall capital costs for warehousing, as well as risks, service costs and obsolescence. It’s important for warehouse managers to look at these different factors to work out the carrying cost of your inventory and allow them to make changes to increase the turnover. This helps to establish your product demand and therefore how much stock you need to buy and hold so that there are no delays but equally that there is not a huge amount of excess stock being held at any given time. Completing a full inventory annually and updating on a regular basis such as monthly can help to avoid unnecessary warehousing costs and to ensure stock levels are high enough to meet customer demand.

Accuracy across inventory and picking stages

Your internal warehousing database should be updated at all times to correlate with your actual physical inventory so that disparities do not occur. Any inaccuracies can lead to orders being made when there is not enough stock, which can delay the overall delivery time for your customers and create a backlog. At the same time, picking accuracy must be correct to eliminate waste and provide the right orders to customers in the most efficient way possible.

Ratio of inventory to sales

Warehouse management performance can also be measured by your ratio of inventory to sales. If your warehouse is holding large quantities of excess items for extended periods of time, this is a sign that there may be improvements to make to make sure that the correct amount of stock is being stored. This saves space and costs, whilst making room for other stock where needed, and can help to identify which are your high sales items and which are the least popular.

Order rates help measure warehouse management performance

Back order rates are a great indicator of your warehouse management performance. Where there are high back order rates for items that need stock replenishing this can indicate that planning may need to change using forecasting to accurately predict the orders that need to be made to meet demand. Successful deliveries, or perfect orders, are another useful measure. The higher the perfect order rate, the more efficiently your warehousing is likely to be operating – and this can be down to a number of factors such as best practice method and processes put in place. If there is a lower perfect order rate than there should be, it could be time to implement new procedures and checks within your warehouse to improve this.

If you could benefit from utilising already established warehousing, UCS is experienced in providing outsourced warehousing requirements. They can help with different elements from your ordering through to courier services and ultimately full warehousing services.

Get in touch with UCS today by calling 08448 793229.

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