Different Ways To Measure Warehouse Efficiency

The work that goes on inside a warehouse is usually highly organized. Like a living organism, it is constantly in a state of change. Measurements, testing, and audits are all essential things that allow the balance of workflow.

As the workload grows, so does the demand for workers and effectiveness in the workplace. Here are different ways to measure warehouse efficiency for your workplace or business.

Accuracy of Order Picking

This may be one of the most tedious tasks in the whole warehouse. Order picking takes a sharp eye and keen reflexes. The right packages must be consistently picked and sorted out—one after the other, and it must be done for hours on end.

It sounds easy enough (albeit tedious), but whenever you must follow strict codes, numbers, and patterns in order to keep things together, circumstances can become hectic. This is especially true during holiday seasons while many warehouses are taxed to the hilt with orders to get their packages ready for shipment.

Capacity at Its Peak

This is a metric that most warehouses use to best utilize their space. The idea is, whatever percentage they are at during the month is just a step below where they should be unless fully staffed, which is a very rare occurrence.

Always try to push the envelope to best the numbers and keep the warehouse as full as possible. This will ensure that your numbers and percentages stay high for the month and the customers will all get what they ordered.

Capacity on Average

Another metric used in warehousing is the average capacity. Numbers are always moving up and down with inventory, and because of that, it’s hard to keep an accurate record, which is why a metric must be used.

Metrics average the numbers. This must be done consistently to see what those numbers look like on a chart over an extended period. By using this method rather than simply using a numerical value, workers and others involved can use it as a visual aid to help track progress and maintain the warehouse.


As the seasons change and the holidays come along, the demand for things increases drastically. As such, warehouses always see these times as opportunities for shipments to stay in order as much as possible.

Sometimes, however—despite the best efforts of those involved—shipments aren’t always ready as they should be and can even get backed up due to the large amounts of orders. Therefore, they constantly get tracked and recorded so management can prepare in advance by getting percentages on annual spikes. If the right people know an estimate of how much the increase will be, then they’ll know to hire and train the right amount of manpower. In turn, the manpower will operate Toyota material handling forklifts for the season and holidays.

Inventory Counting

As warehouses workers work to keep track of everything moving around them, they’re also constantly looking into the inventory. Losing or gaining extra inventory can drastically affect warehouses over time.

For example, if there’s one unit lost per day, then over the span of a month, an entire shipment could be lost. And likewise, if orders are in abundance, then they’ll sit in the warehouse and take up space when they should be carefully ordered to the correct amounts.

Either scenario will cost the warehouse and management money over time. Therefore, it’s best practice to maintain the correct numbers so profits can be made, and the workers can stay on track with the customers as they request their needs.

Operational and Extensive Audits

Audits are another way of tracking production and productivity over time. They don’t directly affect any individual or group but provide a rubric to track everything bought daily.

Operational audits look at the mechanical and the manpower together to ensure everything is working smoothly. The extensive audits are more detailed and look at the bigger picture, so they might be more spaced out to have a wider scope to plan ahead for future business models.

Making Goals

This should be something every business practices and does well. First, it’s best to have management sit together and discuss these goals privately so the team can all agree and understand the leadership being provided.

Then a company-wide meeting should be held to allow the cohesiveness to settle in so that everyone knows the goals and needs of the company. These meetings should happen at least once a month. This way, the business can work together since they’ll know what the job is and the goal behind it.

Record Performance

Recording performance is useful not only to pick out what individuals or departments are doing wrong but also to help the business excel at doing what it does best. Keeping performance records can prevent everything from falling apart and allow groups to grow as a team. Individuals will learn or become better at being part of a team. Performance revisions and recordings are huge when it comes to showing progress or helping the company improve in areas that need help.

Key Performance Indicators

While this part of warehouse management is a different way of measuring warehouse efficiency, it’s a lifesaver for management and manpower. Performance indicators highlight what your team is doing well and can act as praise when they accomplish difficult things. This will not only boost confidence but also allow workers to succeed and work harder to achieve their assigned goals and tasks.

It’s very easy to get caught up in the workflow and have little time to commune with every individual. So, making the necessary time to sit down with them individually can play a huge role in the impact you make in their lives. A strong foundation of communication will also allow you to establish a relationship and a repertoire with them, which will include productivity and trust as you move forward.

Different Ways To Measure Warehouse Efficiency