{"id":21369,"date":"2023-04-17T10:27:21","date_gmt":"2023-04-17T08:27:21","guid":{"rendered":"https:\/\/demohellostudio.it\/oldlcs\/logistics-kpis-parameters-for-measuring-warehouse-efficiency\/"},"modified":"2023-07-03T15:59:37","modified_gmt":"2023-07-03T13:59:37","slug":"logistics-kpis-parameters-for-measuring-warehouse-efficiency","status":"publish","type":"post","link":"https:\/\/demohellostudio.it\/oldlcs\/en\/logistics-kpis-parameters-for-measuring-warehouse-efficiency\/","title":{"rendered":"Logistics KPIs. Parameters for measuring warehouse efficiency"},"content":{"rendered":"<p>KPIs (Key Performance Indicators) for <strong>warehouse management<\/strong> are <strong>performance indicators<\/strong>, useful for assessing the <strong>efficiency of the company&#8217;s logistics<\/strong> and identifying strengths and weaknesses related to <a href=\"https:\/\/demohellostudio.it\/oldlcs\/en\/how-to-manage-stocks-the-main-organisational-models\/\">stock management<\/a>. By expressing measured performance in a numerical and therefore objective form, KPIs allow you to:<\/p>\n<ul>\n<li>Prendere decisioni consapevoli basate su dati oggettivi.<\/li>\n<li>Planning activities and coordinating resources (personnel and equipment) for the management of operational flows;<\/li>\n<li>Monitor logistics trends, productivity and the level of service provided, also making comparisons with previous periods;<\/li>\n<li>Identifying critical aspects and strategic opportunities for improvement;<\/li>\n<li>Make conscious decisions based on objective data.<\/li>\n<\/ul>\n<p>In this article we see what the <strong>main KPIs for logistics<\/strong> are and why keeping track of them makes <strong>warehouse management more efficient<\/strong>.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-21360 size-full\" src=\"https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Logistica-Magazzino.jpg\" alt=\"Logistica magazzino\" width=\"800\" height=\"534\" srcset=\"https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Logistica-Magazzino.jpg 800w, https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Logistica-Magazzino-300x200.jpg 300w, https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Logistica-Magazzino-768x513.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<h2><span style=\"font-weight: 400;\">Fundamental KPIs for designing LCS Group&#8217;s tailor-made solutions<\/span><\/h2>\n<p>Keeping KPIs as a reference is fundamental for improving productivity and increasing service quality. For more than thirty years in the intralogistics sector, <a href=\"https:\/\/demohellostudio.it\/oldlcs\/en\/\"><strong>LCS<\/strong><\/a>, starting with data analysis, designs and implements <strong>warehouse management solutions<\/strong> that optimise performance.<\/p>\n<p><strong>Logistics KPIs<\/strong> measure the performance of a wide range of processes, including warehousing operations, picking activities, inventory management, shipping, delivery, transport. In the following paragraphs, we elaborate on the main indicators examined by LCS, related to:<\/p>\n<p><strong>Inventory management:<\/strong><\/p>\n<ul>\n<li>Rotation index<\/li>\n<li>Stock breakage index<\/li>\n<li>Stock lead time<\/li>\n<\/ul>\n<p><strong>Warehouse operation<\/strong>:<\/p>\n<ul>\n<li>Warehouse occupancy rate<\/li>\n<li>Incoming or outgoing handling<\/li>\n<li>Reliability of deliveries<\/li>\n<li>Puntualit\u00e0 della consegna<\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">The rotation index<\/span><\/h3>\n<p>The <strong>stock rotation index<\/strong> indicates <strong>the number of supplies of a certain commodity in a certain period of time<\/strong> (usually a year, but can also be a quarter or a quarterly period). It then calculates how many times, in a given time period, the stored goods complete the entire business cycle (sale, exit from the warehouse and collection).<\/p>\n<p>The presence of high-turnover goods is an advantage for the company, as more product handling reduces storage costs.<\/p>\n<p>The formula for calculating the rotation index is as follows:<\/p>\n<p><strong>Inventory rotation index<\/strong> = cost of sold goods \/ average stock held.<\/p>\n<h3><span style=\"font-weight: 400;\">Stock breakage index<\/span><\/h3>\n<p>The <strong>stock breakage index<\/strong> shows <strong>the<\/strong> <strong>amount of unfilled orders<\/strong> because there is not enough stock to meet demand. In fact, stock breakage means the depletion of a particular commodity in the warehouse. This KPI is important because it assesses the <strong>company&#8217;s ability to respond to demand <\/strong>and identify inventory management problems.<\/p>\n<p>A low break-up index means that the company is able to deliver to customers efficiently.<\/p>\n<p>This is the formula to calculate it:<\/p>\n<p><strong>Stock breakage index<\/strong> = surplus stock value \/ stock value<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-21363 size-full\" src=\"https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Magazzino-automatico-LCS.jpg\" alt=\"mafazzino automatico LCS\" width=\"800\" height=\"480\" srcset=\"https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Magazzino-automatico-LCS.jpg 800w, https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Magazzino-automatico-LCS-300x180.jpg 300w, https:\/\/demohellostudio.it\/oldlcs\/wp-content\/uploads\/2023\/04\/Magazzino-automatico-LCS-768x461.jpg 768w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<h3><span style=\"font-weight: 400;\">Wearhouse Lead Time<\/span><\/h3>\n<p>The <strong>KPI &#8216;Lead Time&#8217;<\/strong> calculates <strong>the time between the beginning and the end of a production process<\/strong>. In a company, lead time can take on different time dimensions depending on the areas, for example:<\/p>\n<ul>\n<li><strong>Procurement lead time<\/strong>: the time it takes to receive from suppliers the material to be used in production processes or the goods to be resold.<\/li>\n<li><strong>Production lead time<\/strong>: the time taken by the manufacturer to complete an order after the generation of a production order.<\/li>\n<li><strong>Warehouse lead time<\/strong>: the time taken by logistics to receive, store, handle, pick and ship goods.<\/li>\n<\/ul>\n<p>In the management of a warehouse, monitoring lead time is important to avoid out-of-stocks and failure to fulfil orders, which can lead to slow delivery of goods to the end customer.<\/p>\n<p>The formula for calculating this index is as follows:<\/p>\n<p><strong>Warehouse Lead Time<\/strong>: Actual Lead Time \/ Expected Lead Time<\/p>\n<h4><span style=\"font-weight: 400;\">Wearhouse occupancy rate<\/span><\/h4>\n<p>This <strong>warehouse management KPI<\/strong> calculates <strong>the amount of floor space occupied during goods receipt and delivery operations<\/strong>.<\/p>\n<p>The value of the index must not be too high, otherwise it means that a part of the goods in the warehouse is not located on the shelves but occupies the aisles, effectively slowing down storage and retrieval flows.<\/p>\n<p>The formula for this performance indicator is:<\/p>\n<p><strong>Warehouse occupancy rate<\/strong> = space occupied \/ total space<\/p>\n<p>This KPI is closely related to the following one: the incoming or outgoing handling rate.<\/p>\n<h4><span style=\"font-weight: 400;\">Incoming or outgoing handling<\/span><\/h4>\n<p><strong>Warehouse movements<\/strong> are the set of operations related to the movement of goods to be stored. They can be of two types:<\/p>\n<ul>\n<li><strong>Incoming movements<\/strong> (warehouse loading activities), which include purchased goods or customer returns;<\/li>\n<li><strong>Exit movements<\/strong> (warehouse unloading activities), which include, for example, the sale of goods, returns to suppliers and warranty replacements.<\/li>\n<\/ul>\n<p>Keeping track of these allows one to assess the functioning of the warehouse.<\/p>\n<p>The following formula applies:<\/p>\n<p><strong>Incoming (or Outgoing) Movement Index<\/strong> = Number of incoming (or outgoing) rows \/ total movements per day<\/p>\n<h3><span style=\"font-weight: 400;\">Reliability of deliveries<\/span><\/h3>\n<p>Achieving maximum efficiency in the handling of every order received is crucial for improving the company&#8217;s image and increasing sales. <strong>Delivery reliability<\/strong> is therefore one of the most important KPIs for warehouse logistics.<\/p>\n<p>It measures the <strong>quantity of orders processed, dispatched and delivered without problems<\/strong>, e.g. order errors or damaged goods. A good delivery reliability index shows an efficient corporate supply chain and translates into satisfied customers and loyalty.<\/p>\n<p>This is the formula for calculating this indicator:<\/p>\n<p><strong>Delivery Reliability<\/strong> = Number of incorrect deliveries \/ number of total deliveries<\/p>\n<h3><span style=\"font-weight: 400;\">Punctuality of delivery<\/span><\/h3>\n<p>This index makes it possible to calculate the <strong>quantity of orders sent complete and carried out within the delivery time agreed with the customer<\/strong>.<\/p>\n<p>In logistics, delivery time is measured from when the order is prepared for delivery to when it is delivered to the customer. A company performs well when all orders (or a large number of them) are delivered correctly and on time. The objective is therefore to <strong>reduce the average time between preparation and delivery without deteriorating service quality<\/strong>.<\/p>\n<p>The formula to calculate this KPI is:<\/p>\n<p><strong>On-time delivery index<\/strong> = Orders delivered on time \/ total orders delivered<\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">LCS Group and customized management solutions<\/span><\/h2>\n<p>Through KPI analysis, therefore, the warehouse management activity is measured and evaluated as a whole. This requires functional solutions: <strong>LCS Group<\/strong> offers customers tailor-made and <strong>reliable <\/strong><a href=\"https:\/\/demohellostudio.it\/oldlcs\/en\/industry-software\/\"><strong>industry software<\/strong><\/a> with simple and intuitive interfaces to control and optimise process automation.<\/p>\n<p>This improves business performance and provides customers with a fast, efficient and top-class service. For more information, <a href=\"https:\/\/demohellostudio.it\/oldlcs\/en\/contacts\/\"><strong>contact LCS<\/strong><\/a> by following the link. Together we will design the best solution for your logistics.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>KPIs (Key Performance Indicators) for warehouse management are performance indicators, useful for assessing the efficiency of the company&#8217;s logistics and identifying strengths and weaknesses related to stock management. By expressing measured performance in a numerical and therefore objective form, KPIs allow you to: Prendere decisioni consapevoli basate su dati oggettivi. Planning activities and coordinating resources [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":21358,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[78],"tags":[],"class_list":["post-21369","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.2.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Logistics KPIs: to evaluate warehouse efficiency<\/title>\n<meta name=\"description\" content=\"KPIs for warehouse management are performance indicators useful for evaluationg the efficiency of company logistics. 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