Warehouse receiving metrics and KPIs must be tracked to improve the operations of warehouses and distribution centers, specifically in the receiving area. Knowing these metrics is essential to discovering any lapses that impede productivity and efficiency.
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This article will discuss various warehouse receiving metrics you must track to optimize your receiving process and improve your warehouse’s overall productivity.
Importance of Tracking Warehouse Receiving Metrics
Tracking warehouse receiving metrics allows you to measure the efficiency of your receiving process. With this information at hand, you would have the ability to take corrective measures as needed to streamline the process and improve productivity. Also, optimizing your receiving process would positively impact all subsequent warehouse processes.
Listed below are warehouse receiving metrics you must regularly track to know the performance of your receiving process and pinpoint areas for improvement.
Warehouse Receiving Metrics You Must Track
1. Cost of Receiving Per Receiving Line
The cost of receiving per receiving line in warehouse receiving metrics talks about the cost of acquiring and handling items sent to your warehouse. The formula for the cost of receiving per receiving line is:
The objective of measuring the cost of receiving per receiving line is to ensure that cost is gradually reduced or kept at a minimum. This can be achieved by spending less time receiving items in the docking bay, which increases the number of items each receiving line can process. The faster you receive items, the lower the cost you incur.
How to Optimize:
To optimize this and get better results in your warehouse receiving metrics, warehouse managers must allocate the right labor resources in the receiving process. If labor is under-allocated, receiving cargo would take more time, which increases cost. However, if it is over-allocated, it also increases cost since the labor resources could have been spent on other productive tasks. Factors such as the type and volume of cargo coming through must also be accounted for to allocate the correct number of personnel and reduce costs.
2. Receiving Productivity
Receiving productivity in warehouse receiving metrics talks about how much work is being done in the receiving area. To better understand this warehouse receiving metric, here is its formula:
The aim here is to increase your warehouse’s receiving productivity. This can be achieved by spending less time receiving and handling each inventory. When less time is spent per inventory in the docking bays, your warehouse can receive more goods, and fewer disruptions can occur in the subsequent processes.
How to Optimize:
The solution to optimizing performance in this warehouse receiving metric is to provide the right equipment to employees in the receiving area. Using appropriate equipment, such as forklifts or power pallet trucks, will expedite the receiving process while requiring less labor. This, in turn, increases overall productivity in the process.
3. Receiving Accuracy
In warehouse receiving metrics, receiving accuracy refers to the number of correct items sent to a storage facility. There are two factors to consider in this metric: the warehouse’s suppliers and personnel in the receiving department. If the supplier ships incorrect items and the employees do not check them, your receiving accuracy will be negatively affected.
The formula for receiving accuracy is:
The aim is to ensure that the warehouse frequently meets 100% accuracy in receiving the correct inventory.
How to Optimize:
To optimize this warehouse receiving metric, you must provide easy-to-understand procedures and a failsafe process to ensure that the correct items are delivered to your warehouse. If providing extra personnel for double-checking is too costly, an automated program can ensure accurate processing in the receiving department to prevent human errors.
4. Dock Door Utilization
Dock door utilization in warehouse receiving metrics is measured by how efficiently the dock doors are used. To measure this, here is the formula:
If the result of this warehouse receiving metric is low, it signifies that you have unutilized dock doors, which increases costs since you may be paying for a larger space than you need. However, if particular dock doors are used occasionally, it may indicate the need for better truck management to avoid wasting time utilizing them.
How to Optimize:
The most efficient way to optimize this warehouse receiving metric is to keep communication lines open between the receiving area and the truck drivers when the latter is close to the warehouse. By communicating with the truck drivers, you can inform them of the status of the docking bays in real time. If an accident happened in one of the dock doors, you could tell your truck drivers to reroute to another docking bay to unload their items and prevent a bottleneck.
5. Receiving Cycle Time
In warehouse receiving metrics, receiving cycle time refers to when a product item is processed in the receiving area. This includes accounting for it, figuring out where it should be shelved, and finally storing it in its place.
The formula for receiving cycle time is:
This warehouse receiving metric measures the time spent processing receipts upon the item’s arrival at the receiving area. In time, receiving, handling, and processing product items in the docking bays should go faster.
How to Optimize:
For employees to work faster, you should review the setup of your docking bays and see if you could adjust it to minimize travel time from the trucks to the shelves. You should also check what tools/resources your employees need the most when receiving and processing cargo and ensure they have the necessary ones in that area.
Summary
The warehouse receiving metrics listed above are necessary for every warehouse manager to measure in their facility. Having the right warehouse receiving metrics makes it easy to detect if corrective measures must be taken in the receiving process. This information can help you increase efficiency, productivity, and safety in the receiving process, which will impact all subsequent warehouse processes.
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