There are many warehouse KPIs manufacturers can track. We’ve talked about several of them in a previous article entitled Which KPIs Should Your Distribution Accounting Software Display? One which many warehouse managers often fail to track is the efficiency of the receiving area.
Problems Caused by Inefficient Receiving Areas
An efficient warehouse operation begins with attention to the receiving area. If the receiving area is cluttered or there is no process to move goods from receiving into inventory, the warehouse struggles with delays, inefficiencies, and problems.
Problems caused by poor receiving area processes include:
- Products seem to be late, but when the vendor is contacted, they report items were delivered days or even weeks ago.
- Accounting receives bills for orders that haven’t arrived yet—because the items are still sitting in the receiving area and haven’t been logged into inventory yet.
- Customers call with complaints about delayed orders because the company is still waiting for parts or items to arrive, only to find the missing items are already in the receiving area.
- Shipping carriers complain because no one is there to unload an order, or the wrong equipment for unloading is used.
- Not enough people are around to unload the items from receiving, so they continue to pile up.
Each of these problems points to an inefficient and poorly managed receiving area. To fix the problem, warehouse KPIs must include receiving. Only by setting goals can you hope to meet them.
Warehouse KPIs for the Receiving Area: Track Receiving and Booking
The first items to track are receiving processing and booking time. How long does it take from receipt of goods to booking them into inventory?
You can now use the inventory and warehouse management system to find the average time for receiving and booking. Then, use the average as the benchmark for improvement.
A good rule of thumb to estimate receiving efficiency is to calculate the time between purchase order delivery and when the items are available for sale—the shorter the time, the more efficient your warehouse.
Improving Efficiency Begins With Pre-Receiving
The receiving process begins with pre-receiving. Managers need to work with their suppliers to ensure adequate information is included in the shipping labels and bill of lading to help the warehouse team properly log the materials in. The warehouse manager should also coordinate such details, such as whether the items are loose or palletized, items per carton, and package sizes and weights to ensure the proper equipment is available to move the cargo on delivery.
Adequate Staff and Equipment Saves Time
Another key to improving warehouse efficiency and achieving warehouse KPIs is to ensure adequate staff and equipment are available in the receiving area when shipments arrive. Bottlenecks occur when too few staff are available to unload and check items into the inventory. Additionally, if you don’t have the right equipment waiting to unload the cargo, delays will occur.
Part of ensuring the right equipment and staff are available is the pre-receiving step, above. If you know whether the cargo is loose or palletized, for example, you know whether to bring a forklift or another piece of equipment to transfer the materials into receiving. If the boxes are correctly labeled, unpacking and booking items into inventory goes a lot faster.
Safety Is First
Although it’s tempting to judge warehouse efficiency solely on speed, safety should be part of warehouse KPIs. Ensuring adequate training for warehouse staff, including training on how to lift heavy boxes, operating equipment, and other safety considerations, ensure your warehouse team achieves the most important KPI of all: safety.
Track, Measure, Improve Warehouse KPIs With Scanco and Emerald TC
Emerald TC is an authorized reseller of Scanco inventory management barcode scanning software. Scan items into receiving quickly using Scanco’s easy-to-use system. Track, measure, and improve warehouse efficiency with the right tools.
Contact us or call 678-456-6919 for more information.