5 Most Useful Fulfillment Metrics
When establishing fulfillment center metrics, catalogers should use performance measures to drive a change in behavior. These help you track progress and meet goals. Turn that valuable data into meaningful and actionable information, otherwise it's analogous to having a data dump.
Which metrics should you track? Consider your company’s goals and objectives, improvement opportunities, strategic projects and what’s most important to your customers. You may find that the most popular metrics often aren't the most useful. For example, the top metric, on-time shipments, shows how effectively your warehouse ships orders. But not if customers received their orders when they wanted or if orders were complete. However, there are five very informative metrics every cataloger should track.
The Most Popular Metrics
Don’t measure just for measurement’s sake; focus on collecting metrics in areas where you’d like to drive positive changes to further your company’s objectives. Only a few statistics can become process measures. And just a few among them are key performance indicators that’ll track progress toward strategic goals.
Catalog companies have two primary goals:
✔ meet the customer service level commitment; and
✔ improve operational efficiency — to reduce or at least maintain operational costs.
However, many companies track metrics that only reveal small bits of information that factor into these goals, and not holistic measurements that may reveal how to close those gaps.
In a survey my firm performed last year for the Warehouse Education Research Council, we asked respondents what metrics they use. This list shows the top 10 metrics companies track. Then we'll introduce five more metrics that reveal the processes that actually cause shortfalls in these areas.
1. Costs/Sales Relationship
Distribution typically includes processes related to tracking inventory and product availability, receiving, incoming inspection, storage, pick/pack, product shipment, transportation management, and management of third-party logistics storage and shipping performance. Process improvements will lower costs, while process inefficacies will increase them. As such, this is an excellent high-level metric, especially if you’re tracking ongoing improvement projects. Distribution costs can also be rolled up as a component of total supply-chain costs as a percent of sales.