Top 5 Metrics for Measuring Warehouse Productivity

Abby Jenkins, Product Marketing Manager

December 19, 2019

Companies that make, sell or distribute products typically require receipt, storage and fulfillment of goods into, within, and out of a warehouse. Without a system specifically design for warehouse management in place, this can quickly become a manual, costly and inefficient process that won’t support a fast-growing business. 

Over 90% of warehouses(opens in new tab) have adopted some sort of warehouse management system.

Optimizing day-to-day warehouse operations is critical to increasing warehouse productivity.

According to a 2019 Warehouse Education and Research Council 2019 Operational Benchmarking Report(opens in new tab), the top 5 KPIs for benchmarking your warehouse productivity are:

  1. Order Picking Accuracy (percent by order) – Incorrect order picking results in increased labor costs, inaccurate inventory counts, delayed shipments and decreased customer satisfaction if the error is not caught before the order ships.

At best-in-class operations, 99.89% of orders are picked correctly.

  1. Average Warehouse Capacity Used – The average capacity used over a certain period of time - this is a key space utilization KPI.

Best-in-class companies utilize on average 92.54% of warehouse space.

  1. Peak Warehouse Capacity Used – Peak capacity is another KPI for tracking how well a warehouse uses its space during its busiest times.

Best-in-class companies utilize 100% warehouse space during peak times.

  1. On-time Shipments – This is a delicate balance to achieve without compromising order accuracy. Today’s consumer is largely brand agnostic and concerned with getting the product they want in the quickest and cheapest way possible.

Best-in-class companies ship 99.7% of orders on time.

  1. Inventory Count Accuracy by Location – Understanding total inventory available is important but equally important is how that inventory is distributed across multiple locations so that orders are routed to the proper location for fulfillment and out of stocks are not incurred.

Best-in-class companies have a 99.9% inventory count by location.

Click here to see the chart to gauge warehouse performance.(opens in new tab)

Nearly half of all warehouses are still relying on a paper-based picking method to fulfill orders(opens in new tab) (meaning Excel or some spreadsheet method).

Warehouse operations can be improved with intelligent pick-and-pack capabilities and a wave-release process, using mobile RF barcode scanning, automating cycle counting(opens in new tab) and integrating with shipping systems, all of which elevate visibility, accuracy and efficiency.

NetSuite Warehouse Management System(opens in new tab) (WMS) offers industry leading warehouse management functionality. Specifically designed with the warehouse manager in mind, NetSuite WMS functionality is aimed at improving the user experience and warehouse processing operations. Because NetSuite WMS is built into NetSuite – utilizing core ERP locations, items, bins, inventory and transactions - product companies don’t have to worry about integration efforts or data synchronization.

Reduce operating expenses, improve inventory visibility, achieve better labor management and increase customer service by implementing a WMS system. Learn more about how companies are incorporating a WMS into their overall fulfillment strategy(opens in new tab).

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.