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.
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, you would be able 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 improve warehouse receiving metrics, warehouse managers need to allocate the right amount of labor to the receiving process. Under-allocating labor will lead to longer cargo-receiving times and increased costs while over-allocating labor will also increase costs by diverting resources from other productive tasks. Considering factors such as the type and volume of incoming cargo will help in determining the appropriate number of personnel to allocate and reducing 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. To achieve this, reduce the time spent on receiving and handling each inventory. By allocating less time to each inventory in the docking bays, your warehouse can process more goods, and subsequent processes will encounter fewer disruptions.
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. 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, it will negatively impact receiving accuracy.
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 establish easy-to-understand procedures and a fail-safe 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
The efficiency of dock door usage measures the dock door utilization in warehouse receiving metrics. To measure this, here is the formula:
If the result of this warehouse receiving metric is low, it signifies that you have unused dock doors, which increases costs since you may be paying for a larger space than you need. If we rarely use specific dock doors, it may indicate that we need to improve truck management to avoid wasting time.
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 involves processing a product item in the receiving area, including accounting for it, determining its storage location, and finally shelving it.
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:
To help employees work faster, review the setup of your docking bays. See if you can minimize travel time from trucks to shelves. Also, check what tools/resources your employees need the most when receiving and processing cargo. Ensure they have the necessary ones in that area.
Summary
Every warehouse manager must measure the warehouse receiving metrics listed above in their facility. The right warehouse receiving metrics make it easy to detect if corrective measures are necessary for the receiving process. This information can help you increase efficiency, productivity, and safety in the receiving process, impacting all subsequent warehouse processes.
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