Warehouse Performance Metrics, Balanced Score Card and KPI

Warehouse Performance Metrics are discussed in the APICS CLTD 2017 Learning System (Module 4, Section B, Topic 7). In this short section a key message is to use an audit to measure warehouse performance with the metrics organized in a Balanced Scorecard. The APICS Dictionary, 15th edition, defines Balanced Scorecard as:

‘a list of financial and operational measurements used to evaluate organizational or supply chain performance.’

A balanced scorecard approach in the warehouse can focus on Key Performance Indicators (KPI) in four areas:

  1. Financial: Return on investment
  2. Customer: Customer satisfaction, accounts sales and retention
  3. Business Process: Throughput, safety, risk management
  4. Learning and Growth: Employee retention, skill enhancement, recruitment

APICS Dictionary, 15th edition, defines a key performance indicator as:

‘a financial or non-financial measure used to define and assess progress toward specific organizational goals and typically is tied to an organization’s strategy and business stakeholders.’

The specific metrics you use in your warehouse can come in many forms depending on multiple factors including order profiles, facility design and customer expectations.

To learn more about and how best-in-class facilities achieve quality and continuously improve using warehouse KPIs check out this WERC webinar on 1/26/17, Learn How Minding Your Qs and Ps Will Improve Your Operations.