Top 3PL Warehouse KPIs

In response to the growth of e-commerce and heightened competitiveness in the third-party logistics (3PL) sector, an increasing number of 3PLs are seeking ways to monitor, evaluate, and enhance their company performance. It can be complicated and difficult to implement regulations and procedures that permit the tracking of particular parts of storage, fulfillment, and other processes. Many people utilize software to track their effectiveness, but they still find it difficult to determine which data are most crucial and how to analyze them. However, partnering with 3rd party logistics companies in Dubai like TFI (Total Freight International) can make a world of difference. TFI is one of the leading 3pl logistics companies in UAE. So, if you’re looking for warehousing services in Dubai, the company has a proven track record.

Now, in terms of key performance indicators (KPIs), here are a few listed below that are helpful for 3PLs to start monitoring in order to identify areas that are working well and those that require development.

Before attempting to track or control KPIs, inventory correctness can be a wonderful place to start. (Counted units/Units on record) multiplied by 100 is the inventory accuracy rate. Start by looking at your warehouse management system; it should be simple to check how many units are currently on file from here. 

Secondly, the expense incurred to inventory and hold inventory prior to dispatch is referred to as the carrying cost. Storage, shipping, handling, taxes, replacement, loss, and depreciation are some examples of carrying expenses. Simply sum up the expenses associated with storing and managing that inventory to determine carrying costs. In this type of study, allocating expenses to inventory can depend on the needs and goals of the organization. The effectiveness of your putaway, storage, and inventory management systems, as well as the profitability of certain customer accounts, may be evaluated by keeping track of these expenditures, which can be substantial for 3PLs. Your company's cash flow may be in jeopardy if carrying costs as a whole are too high.

Thirdly, shrinkage is an inconvenient but essential component of monitoring inventory KPIs. In addition to theft, shrinkage can also involve lost things, unsaleable items, damaged items, and other losses as a result of unforeseen occurrences. However, figuring out shrinkage is simply the first step. Finding the cause, figuring out whether the issue can be fixed, and developing a strategy is crucial. Many firms anticipate a typical rate of shrinkage based on experience, and some shrinkage may be unavoidable. However, the ideal case for shrinkage is that it reveals a flawed or ineffective warehousing procedure and alerts management to its need for repair. Investigate further if shrinkage rates start to increase or become greater than usual over time.

Last but not least, the fulfillment lead time measures how long it takes for an end-user to receive a product after placing an order. E-commerce shopping cart integration with your WMS can significantly reduce this lag time. As soon as feasible after that, orders must be processed in order for the final customer to get them as soon as possible. Lead time, together with the effectiveness of your procedures and inventory control, can be a sign of client satisfaction. If this statistic is successful, it might even serve as a selling point for potential clients. If it's negative, it can be a sign that your warehouse operations are ineffective and could eventually drive away customers.

Of course, there are a tonne more metrics available that are particular to warehousing capacity, throughput, and infrastructure management that 3PLs can use to monitor the operation of practically every aspect of their organization. So, for the best 3PL services, check out http://www.tfiworld.com/.