GITNUX MARKETDATA REPORT 2023

Must-Know Distribution Kpis [Latest Report]

Last Updated: October 31, 2023

Written & Summarized by: Jannik Lindner

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Highlights: The Most Important Distribution Kpis

1. Inventory Turnover
2. Order Cycle Time
3. Order Picking Accuracy
4. On-Time Delivery
5. Order Fill Rate
6. Carrying Costs
7. Perfect Order Rate
8. Obsolete Inventory
9. Order Visibility
10. Shipment Accuracy
11. Dock-to-Stock Time
12. Stock Availability
13. Return Rate
14. Transportation Cost per Unit
15. Warehouse Utilization

Distribution Kpis: Our Guide

In today’s fast-paced business landscape, understanding key performance indicators (KPIs) in distribution is crucial for developing effective strategies. Our latest report delves into the must-know distribution KPIs that can give you a competitive edge. Learn how these indicators can drive growth, streamline your supply chain process, and maximize profitability in your organization.

Inventory Turnover

The number of times a company sells and replaces its inventory within a given period.

Order Cycle Time

Measures the total time taken from receiving an order to delivering it, reflecting the efficiency of the order fulfillment process.

Order Picking Accuracy

Represents the percentage of accurately picked items from the warehouse, impacting customer satisfaction and overall distribution costs.

On-Time Delivery

The percentage of orders that are delivered to the customer within the agreed-upon time frame, positively affecting customer satisfaction and retention.

Order Fill Rate

Represents the percentage of total customer orders fulfilled from available inventory without any backorders.

Carrying Costs

The costs associated with holding, storing, and managing inventory.

Perfect Order Rate

Measures the percentage of orders delivered without any errors, such as incorrect items or damages.

Obsolete Inventory

Represents the percentage of non-saleable inventory in the distribution center.

Order Visibility

Refers to the extent to which customers and the company can track an order in real-time.

Shipment Accuracy

Measures the proportion of shipments delivered accurately, reflecting the competency of pick, pack, and ship processes.

Dock-To-Stock Time

Represents the time taken to move items received at the dock to the appropriate storage location in the warehouse, reflecting warehouse efficiency.

Stock Availability

Refers to the percentage of time a specific product is available in stock.

Return Rate

Represents the percentage of items returned by customers.

Transportation Cost Per Unit

Captures the average amount spent on shipping each unit to the customer, impacting distribution cost efficiency and overall profit margins.

Warehouse Utilization

Measures the percentage of warehouse space being effectively used for inventory storage, indicating how well the facility’s capacity is being utilized for distribution.

Frequently Asked Questions

What are Distribution KPIs and why are they important?

Distribution KPIs (Key Performance Indicators) are metrics used to evaluate the efficiency and success of your distribution process in delivering products to customers. They are important as they help companies identify areas of improvements, optimize operations, reduce costs, and increase customer satisfaction.

What are some examples of Distribution KPIs?

Examples of Distribution KPIs include order fill rate, on-time delivery rate, order cycle time, distribution cost per unit, and inventory accuracy. These KPIs help determine if your distribution system is meeting its objectives and highlight potential areas for improvement.

How do you establish an effective set of Distribution KPIs?

To establish an effective set of Distribution KPIs, you should first define your distribution objectives, such as reducing costs or improving customer service. Then, identify the critical metrics that reflect those objectives, ensuring that they are quantifiable, actionable, and relevant. Finally, assign suitable targets and continuously monitor and review the KPIs to make necessary adjustments.

How should KPI targets be set for maximum impact?

KPI targets should be set based on a combination of historical data, competitor benchmarks, and your company’s overall goals. Targets should be realistic, achievable, relevant to the business context, and consistent with industry standards. Revisiting and adjusting targets when necessary helps ensure that they continue to drive performance improvements.

How can Distribution KPIs be used to improve supply chain management?

Distribution KPIs can be used to identify inefficiencies in the supply chain, revealing potential areas for cost reduction and process improvements. By monitoring these metrics, organizations can gain insights into warehouse management, transportation optimization, demand and inventory forecasting, and customer service performance. This, in turn, enables companies to make data-driven decisions and devise effective strategies to enhance their overall supply chain effectiveness.

How we write these articles

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly. See our Editorial Guidelines.

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