Benchmarking Metrics of Warehouse Operations

   
Over the years, F. Curtis Barry & Company has had the fortunate opportunity to have hundreds of warehouse clients in the catalog and eCommerce industry. One question that comes up in almost every project is how the client ranks when it comes to productivity and efficiency. See for yourself how you stack up to the industry:

Cost Per Order (fully loaded)
$8–$13 including call center and warehouse includes direct labor, indirect labor, benefits, occupancy, packing supplies, telecom and credit card processing. IT DOES NOT include shipping and handling revenue or shipping costs.  It distorts comparability between companies.  50% are warehouse costs and 50% call center costs; 50% or more is direct labor in call center and warehouse.
 
READ: 38 Fulfillment Cost Reduction and Productivity Improvement Ideas
 
Order Processing Turnaround Time
For in stock products 100% in 24 hours. There are several leaders, like Crutchfield and Backcountry.com, that are shipping all orders the same day, if the order is received by 5 P.M.

Initial Customer Order Fill Rate
While this is an inventory control metric, initial customer order fill rate does dramatically affect fulfillment performance. Definition: Percentage of customer orders shipped complete in 24 hours (or whatever your shipping standard is).  Typically good performance is indicated below:
  • Advanced fashion: 70%–80%
  • Reorderable apparel: 80%–90%
  • Gifts/home:  85%–95%
  • Business supplies:  98%–100%


Order Accuracy

  • 99.5% without bar code
  • 99.9% with full inventory process bar code


Inbound Receipts, Dock to Stock
Through all processes:

  • 8–24 hrs. turnaround time
  • Can be 2 hours if you make dock “live” for inventory picking

READ: 27 Warehouse Layout, Design and Efficiency Principles

Per-Hour Benchmarks

  • Receiving  units per hour 150–170
  • Picked units: 140–180 per hour
  • Orders packed:  25–30 per hour
  • Packages shipped/manifested:  140–160 per hour
  • Total orders processed: 11–13 per FTE/hour
  • Returns processed per hour:
    – 24–48 hours processing time
    – Apparel: 15-20 per hour
    – Hard goods: 35–40 per hour

Inventory Accuracy

  • Bar-coded: 99.8%–99.9%
  • Conventional: 99.5%
  • Good cycle counts can eliminate physical inventories.