22nd July 2020
What are the key factors to optimize and measure when sending parcels from your warehouse?
The process behind a shipment can be split into several parts, each of which can be measured and optimized. KPIs (Key Performance Indicators) are objectives which an employee or a department can work towards in order to optimize a company’s processes.
We have asked experts about which warehouse KPIs are most valuable to measure when you want to optimize shipment and delivery processes in your organisation. Here are their answers.
The process of picking goods can be divided. You can affect the overall speed by optimizing every single part. Therefore, picking speed depends on several factors:
A KPI for picking speed can therefore vary a lot. A concrete example of a KPI for a warehouse with 250,000 different small items may be picking 30-60 order lines per man per hour. – Transport Director, Fredrik Kryasn, Aditro Logistics.
You can increase the speed in several ways. Firstly, integration and reuse of data from your backend systems is important, as you save time compared to manual typing of information. You’ll also save time by automating the choice of shipping method through a system of rules. Once everything is correctly set up, it shouldn’t more than 1 second from the order number being scanned and retrieved from another system to the label being produced. This is not the case for all warehouses, which is why many would achieve significant optimization by automating this.
It is faster to pack a shipment when the package has the correct size for the specific product. Therefore, it is often worth the effort to choose a slightly more expensive cardboard box. In general, it is important to optimize your packaging as best as possible. If you use stretch film for your shipments, you can often choose a lower thickness of stretch film, which adds several meters to the roll. This means fewer roll changes on the machine and a faster packaging speed, so you can use your time on other important tasks. – Sales and Marketing Director, Michael Simonsen, STOK Emballage K/S.
80-90% of the customer experience focused around on-time delivery. Therefore, it is important that you are able to quickly and easily track shipments when customers call wanting to know the status of their orders. We have reduced the customer processing time from 70 seconds to 15 seconds when customer service tracks parcels for customers, as we now do it in an online portal, this is regularly updated with the status on the shipments we produce. Therefore, we are able to immediately track parcels by logging into the portal online without disturbing the different carriers, as all shipment numbers are captured in one system. Customers can also track parcels by themselves in the portal. – CEO, Jesper Hvejsel, Firtal.
Geography and service affect the delivery of your shipments. Day-to-day delivery is widespread in small geographies; great distances take 2-7 days while one-hour delivery is gradually becoming more popular in urban areas where the location of the warehouse allows this. Delivery time is a parameter that is increasingly focused on – and several carriers position themselves with new services. In particular, this is related to delivery time, delivery in the evening, on the weekend or next day. When using delivery as a competitive tool, it is important to measure the effect of your choice: On-time delivery is an important KPI for all senders – especially when you have made a commitment to the receiver to deliver within a certain time frame. KPIs for on-time delivery must therefore naturally be as close to 100% as possible.
Attractive return options as well as simple and efficient returns management at the warehouse is important. When we receive returns at the warehouse, we register the product with a few clicks and use the invoice number to identify the order in a returns portal. Both customers and customer service are able to track returns in the portal. When customers print return labels from our site, they fill out a form as to why they want to return the item e.g. wrong size, credit or repair. That way we can quickly handle the return. It takes a maximum of two days from when we have received the return at the warehouse to the customer receiving a refund. Generally, it is important to keep the number of returns at a minimum by using good product descriptions, product videos, size guides and FAQs. – E-commerce Manager, Jonas Larsen, Friluftsmagasinet.