Key Performance indicators in the food sectors: A Case Study

A client with a vast warehouse of canned vegetables and pickles in Sydney West approached Us to set up KPIs for their business.

Here are some key Supply Chain KPIs that are particularly relevant for food distribution centers:

Inventory Management KPIs

• Inventory Turnover Rate (ITR): Measures how quickly inventory is sold and replaced. A higher ITR indicates efficient inventory management and reduces the risk of spoilage.

• Days Sales of Inventory (DSI): Shows how many days of sales are tied up in inventory. A lower DSI is better, as it means less capital is tied up in stock.

• Inventory Accuracy: Measures the percentage of inventory records that match the physical inventory. High accuracy is crucial for efficient order fulfillment and prevents stockouts or overstocks.

• Order Fill Rate: Measures the percentage of orders fulfilled completely and accurately. A high fill rate indicates good inventory availability and order processing efficiency.

• Product Expiration Rate: Tracks the rate at which products expire or become unsalable due to spoilage or damage. A low expiration rate is essential for maintaining product quality and minimizing losses.

Warehouse Operations KPIs

• Order Picking Accuracy: Measures the percentage of orders picked correctly. High accuracy is crucial for customer satisfaction and reduces returns and re-shipments.

• Order Picking Productivity: Measures the number of orders picked per hour or per worker. Higher productivity indicates efficient warehouse operations and improved labor utilization.

• Warehouse Space Utilization: Measures the percentage of warehouse space that is actively used for storage. High utilization maximizes the use of available space and reduces storage costs.

• Dock Door Utilization: Measures the efficiency of loading and unloading operations at the dock doors. High utilization minimizes downtime and improves overall warehouse throughput.

• Receiving Cycle Time: Measures the time taken to receive and process incoming shipments. A shorter cycle time improves inventory turnover and reduces lead times.

Transportation KPIs

• On-Time Delivery (OTD): Measures the percentage of deliveries that arrive on time. High OTD is crucial for customer satisfaction and maintaining delivery schedules.

• Fuel Efficiency: Measures the fuel consumption per mile or per delivery. Improved fuel efficiency reduces transportation costs and environmental impact.

• Vehicle Utilization: Measures the percentage of time that vehicles are actively used for deliveries. High utilization maximizes the use of the fleet and reduces transportation costs.

• Freight Cost per Unit: Measures the cost of transporting each unit of product. Lower costs indicate efficient transportation operations and improved profitability.

Customer Service KPIs

• Customer Order Cycle Time (COCT): Measures the time taken to fulfill customer orders, from order placement to delivery. A shorter COCT improves customer satisfaction and responsiveness.

• Customer Satisfaction: Measures customer satisfaction with the overall delivery experience, including on-time delivery, order accuracy, and product quality. High satisfaction is crucial for customer retention and loyalty.

• Return Rate: Measures the percentage of orders that are returned by customers. A low return rate indicates high product quality and accurate order fulfillment.

By tracking and analyzing these KPIs, food distribution centers can identify areas for improvement, optimize their operations, and deliver exceptional service to their customers.