KPIs for Warehouse Fulfillment Operations

Here’s an irony for you.  eCommerce companies will invest huge amounts of time crafting performance metrics for fulfillment operations, but spend very little time actively monitoring and managing these key performance indicators (KPIs).

When it comes to running a robust metrics program for eCommerce fulfillment, there’s a right way and a wrong way. In our latest free eBook, we cover 10 tips for setting objectives and measuring performance in fulfillment operations.

The problem that we notice with fast-paced, growing businesses is that they tend to be more top-line focused. In such businesses, it’s tempting to do the “management by exception” thing when it comes to order fulfillment. “Hey, as long as things in the warehouse are running smoothly, let’s just keep selling; no need to invest time reviewing the numbers until there’s a problem.”

Big mistake.

Ongoing monitoring allows you to surface issues before they become problems that impact customer satisfaction and profits. An ongoing dialogue also removes some of the emotional response that is inevitable when you only look at warehouse KPIs when problems occur.

Here are some of the common mistakes eTailers make when managing a metrics program for fulfillment operations:

• Metrics overkill – sometimes simpler is better
• Setting fulfillment metrics with no historical data to support the number, and sourcing these target metrics from (gulp) the internet
• Avoiding frank discussions at the start with outside providers about what happens if and when mistakes occur
• Not discussing the relevance of the KPI scorecard with the people who do the order picking and packing