When we measure warehouse costs the best way is to step in the warehouse owner’s shoes. The target is to sell one pallet place as expensive as possible or as much times as possible. If the warehouse is ours, the most important is the turnover. If we are in FMCG sector we’ll try to “sell” this place at least 4 times during the month. Another efficiency is the number of operations per SKU – procedures should regulate the pattern of one product so that workers do one activity only once.

Applicable KPIs (for FMCG):
– average monthly cost per pallet place (rent, equipment, labor) vs total cost of the inventory (should be less than 1%)
– number of monthly turns per SKU – for majority of SKUs at least 4 times per month; for slow movers once per 6 weeks
– warehouse routs and activities – according the procedure
– number of technical mistakes – in well organized warehouse these mistakes shouldn’t be more than 1-2 per month
– number of discrepancies in physical and documentary availability – should be zero