HOW TO MEASURE WAREHOUSE PERFORMANCE

Warehousing Cost to Sales Ratio

RightChain™ Research’s survey participants, were asked to record their best estimate, of their warehouse cost to sales ratio. Among our survey participants, the median warehousing cost to sales ratio, is 3.0%. The average is 3.4%. In our experience, warehousing cost to sales ratios, range between 1% and 5%. However, any cost to sales ratio, must be taken with a grain of salt, and communicated with care, since sales prices and volumes are out of the control, of the warehouse managers being evaluated by the metric. In a recent client engagement, the director of warehouse operations, was being dissed by the head of sales, because the warehousing cost to sales ratio was so high. The director of warehousing wisely responded back, "If you could increase sales volumes, and prices, the way you promised, we'd look pretty good."

MEDIAN

AVERAGE

Source: RightChain™ Research

RightChain™ Incorporated

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