24 Jul Measuring Warehouse KPIs: Receipt Performance
This is the third in a series of posts looking at measuring KPIs for warehouse operations. We recently outlined the 7 KPIs to track for warehouse improvement. This series takes each KPI and examines it in more detail.
What does receipt performance measure?
Receipt performance is an inbound measure in the warehouse that assesses the speed of booking in goods. It expresses the number of lines and quantities received per person, per hour.
Receipt performance identifies performance issues, shows where process improvements can be made and determines labour requirements.
In some industries, like food or pharmaceuticals, for example, there is a wealth of information that needs to be logged when products are received. Not only are the general line details needed, like SKU numbers and quantities, but often additional info such as batch or serial numbers, expiry dates and so on.
Logging all this supplementary information can be mandatory where compliance with certain standards is required. It’s understandable that this sort of detail is required in highly regulated industries like pharma, but many markets have their own standards and compliance requirements. One of Balloon One’s customers supplies timber products to the large DIY retailers. It has to track batches of timber that are Forest Stewardship Council (FSC) compliant so it can provide proof to those clients and their end consumers that the timber is FSC-certified.
Compliance tracking like this can slow down receiving. And it’s an especially onerous process where data needs to be manually recorded. It can really hinder booking in times, resulting in warehouse inefficiency.
How is receipt performance measured?
If you want to measure receipt performance, you will want to agree on some key assumptions in advance. For example, that a receipt is equivalent to a single line received, what your working hours are, how long your operatives take for lunch or breaks, and that time booking in does not include the putaway.
Then, your measurement equates to the total numbers of lines received per hour, with a breakdown per operative if you want to assess individual productivity levels.
What is a good receipt performance score?
There’s no one size fits all with this KPI. Receipt performance is really company specific and will vary dramatically according to industry. The best thing to do is to measure it and measure it consistently. You then have a benchmark and can see over time if you have improved.
How can you improve your receipt performance score?
If you think your receipt performance scores can be improved, you firstly need to ensure you have put into place best practices for your industry. This can include having the appropriate number of operatives assigned to receipt, checking orders against purchase orders, prioritising receipt, and so on.
But the most significant improvements in receipt performance are seen when the process is automated. It’s the human, labour-intensive tasks that take the time, so a level of automation can really increase the speed of receipt.
One way of doing this is to employ barcode scanning. This eliminates keying in all the data. Boxes or pallets can be labelled with linear barcodes that hold all the relevant data. A quick scan brings in not only the product code and quantity, but also the batch numbers, expiry dates, catch weights and more. The data can be imported straight into the warehouse management system (WMS), saving a huge amount of manual keying time.
Pharmaceutical companies can use 2D matrix barcodes – like QR codes – which hold even more information. This can, for example, include serial numbers of individual packs of tablets. This level of coding helps distributors to meet and comply with the record-keeping required by the Falsified Medicines Directive (FMD), a set of Europe-wide standards for drug tracking.
While not relevant to all industries, it’s clear that in many cases the compliance and regulation needs dictate that a level of technology is an absolute must for those distributors that want to optimise their performance.
If you would like to explore the options for improving your technology, or would like to discuss how to measure receipt performance, Balloon One can help. Our supply chain consultants can analyse your distribution operation and advise on KPI metrics, as well as recommend technology to help boost your supply chain performance. Call us on 020 8819 9071 or get in touch.
Full list of articles in this measuring KPIs series: