You need public warehousing in St. Louis…what KPI’s are important?
When considering the performance of your outsourced logistics and public warehousing in St. Louis, you have a staggering number of variables to choose from. However, many of these indicators tell little about the level of service that your partner actually provides. Once you have established that your partner meets your standards for customer service, there are five key performance indicators that can help you measure the effectiveness of the operation:
Cost per item. If you’re just using public warehousing in St. Louis as opposed to a more comprehensive logistics solution, the storage cost per item might be the most important KPI. Divide your average cost by your average stock. If you spend $1,000 per month and store an average of 10,000 items, your cost would be 10 cents.
Productivity. When you are renting warehouse space on a per square foot basis, you can also compare spaces on the basis of how much you are able to store in a square foot of space. If you can store $100 of product in one square foot in a low-clear height warehouse but $180 in a building with a higher ceiling that accepts taller racks, the second building is more productive. On the other hand, if you aren’t able to take advantage of the additional height, you probably won’t get any additional productivity and won’t be able to justify the higher cost that many high-clear height buildings carry.
Utilization. Like productivity, utilization is another measure of how effectively a warehouse’s space is used. Calculated by dividing the total volume of items stored by the total volume of the warehouse, this metric is a little bit trickier. While utilization that is too low can mean that you are wasting money on unnecessary space, utilization that is too high could end up harming the warehouse’s efficiency as workers trip over each other.
Quality. Applicable to every warehouse, including public warehousing in St. Louis, the quality KPI gets calculated after an audit. It divides the number of audited products that are in the correct location by the total number of products that get audited. The closer the number is to 100 percent, the higher the warehouse operation’s quality.
Cycle Time. A warehouse’s cycle time is a holistic measure of its quality coupled with the effectiveness of your company’s supply chain. Cycle time measures the number of days of inventory that a warehouse has on hand at any given time. Generally, the shorter the cycle time, the better the warehouse is operating since goods that sit cost money rather than make it.
There is plenty to learn about when it comes to public warehousing in St. Louis, but none is more important than tracking your success. To learn more about public warehousing in St. Louis contact us! We would love to talk about our services, and what we can do for you.
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