How to Measure Warehouse Performance

Warehouse Performance, Cost, and Value Measures

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Figure 14. Warehouse activity-based costing allocates the cost of personnel, space, systems, supplies and fees to each warehouse activity. Activity costs may then be allocated to product lines and/or business units.

Figure 15. RightChain™ Warehousing Scoreboard Activity Based Costing Example In this particular analysis the cost of storing and handling an item in the warehouse for a year was estimated to be $340.37. This warehouse managed over 70,000 items; 40,000 of which did not yield $340.37 in sales per year; not even enough to cover their storage and handling costs. Needless to say the finding was taken up with the marketing area and a SKU reduction ensued. Once a warehouse activity based costing analysis has been completed it is not unusual to find that a majority of the warehousing costs are labor costs and that

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