Metrics and KPIs
Metrics turn warehouse and stock data into numbers that can be compared over time. Inventory turnover and days of inventory describe the same thing from two sides, how quickly stock sells through. Stock accuracy shows how far the records can be trusted, and lead time measures how long replenishment takes.
A metric is only useful when it is counted the same way each time, so each definition states what is measured. Lead time also feeds the planning terms in Inventory and stock control, safety stock and reorder point among them.
Terms in this topic
Cost per order line
Cost per order line explained simply: what belongs in the sum, how to work it out, and why the figure can fall without anything improving.
Days of inventory — stock cover
Days of inventory explained simply: how many days your stock would last at today's sales rate. Two versions, and a worked example.
Dock-to-stock time
Dock-to-stock time explained simply: where the clock stops, why available matters more than put away, and why the slow tail is where the money is.
Fill rate
Fill rate explained simply: the four versions that give four different answers, how to work it out, and what to do when two reports disagree.
First time right
First time right explained simply: what counts as rework, how to work the figure out
GMROI
GMROI explained simply: how gross margin return on inventory investment settles the argument between a fat slow margin and a thin fast one.
Inventory carrying cost
Inventory carrying cost explained simply: the five things that belong in the sum, how to work it out as a percentage
Inventory turnover
Inventory turnover explained simply: how many times a year you sell through your stock, how to work it out and what a low number tells you.
Labour productivity
Warehouse labour productivity explained simply: what it counts that picks per hour does not, how to work it out, and what actually moves it.
Lead time
Lead time explained simply: the time from placing a supplier order to having the goods ready to sell. Why to measure the real figure, with an example.
OEE
OEE explained simply: the three components that multiply together, where it belongs in a warehouse and where it does not
Order cycle time
Order cycle time explained simply: where to start and stop the clock, how to work it out, and why the average hides the orders your customers complain about.
OTIF
OTIF explained simply: what on time in full measures, why the choice of which date you measure against can move it by ten points, and what actually fixes it.
Perfect order rate
Perfect order rate explained simply: the four things that all have to go right, why multiplying them is brutal, and how to read the figure without despairing.
Picking accuracy
Picking accuracy explained simply: how to work it out, why the figure depends on where you catch the error, and what actually moves it on the floor.
Picks per hour
Picks per hour explained simply: what it counts, how to work it out, and why a high number on its own does not tell you the shift went well.
Return rate
Return rate explained simply: how to work it out, the three choices that decide what the figure means, and why a falling rate is not automatically good news.
Sell-through rate
Sell-through rate explained simply: how to work it out, why a figure without a date attached is meaningless, and why 100 per cent means you under-bought.
Service level
Service level explained simply: why it is a dial rather than a measurement, how it sets your safety stock
Shrinkage
Shrinkage explained simply: how to work it out, why paperwork rather than theft is usually the biggest cause, and how to find out which it is.
Space utilisation
Space utilisation explained simply: positions versus cubic fill, how to work both out, and why a figure near 100 per cent is a warning rather than a win.
Stock accuracy — inventory record accuracy
Stock accuracy explained simply: how often the number in your system matches the number on the shelf. How to measure it, with a worked example.
Stockout rate
Stockout rate explained simply: why counting empty bins and counting lost demand give wildly different answers, how to work both out, and which one to act on.
Throughput
Warehouse throughput explained simply: what it counts, why it is a volume rather than a score, and why the peak hour matters more than the daily average.
Also relevant to this topic
Other topics
- Inventory and stock controlKnowing what you hold and where: SKUs, lots, stock takes, safety stock.31 terms
- Inbound: receiving and putawayFrom dock to shelf: receiving, putaway, slotting and cross-docking.9 terms
- Outbound: picking, packing and shippingFrom order to carrier: picking methods, packing, cut-off times, despatch.27 terms
- Warehouse automation (MHE)Machines that store, move and sort goods, and the technologies that guide the work.19 terms
- Systems and integrationWMS, OMS, WCS, WES, EDI and how warehouse software connects.10 terms
- Retail and supply-chain standardsGS1 identifiers, barcodes and the messages trading partners exchange.9 terms
Ready to see BizBloqs on your own process?
Book a demo and we will walk your warehouse and order flow end to end — inbound, storage, picking, shipping, returns — and tell you honestly what BizBloqs would change.
Two questions about your own operation
How many of your articles sit in a pick location they empty less than once a month?
Part one: Laying out a warehouse does not start with the racking
After your last integration, how many systems hold a stock quantity for the same item? Name them.