How Can We Create Effective KPIs for Our Pharmacy Warehouse Team?

Dear team, please help me create a format for Key Performance Indicators (KPIs) for the warehouse staff. Our organization is a retail pharmacy chain, and the warehouse primarily handles medicines.

Thank you in advance.

Anu

Hi Allmed,

Creating a Key Performance Indicator (KPI) format for warehouse staff in a retail pharmacy chain, where the warehouse primarily deals with medicines, involves identifying key metrics that reflect efficiency, accuracy, and overall effectiveness in managing pharmaceutical inventory. Here's a sample format you can use:

Warehouse Staff KPI Format for Retail Pharmacy Chain

I. Inventory Accuracy

Order Accuracy Rate:
Definition: Percentage of orders accurately picked and packed.
Formula: (Number of accurate orders / Total number of orders) * 100
Target: 98% or higher

Stockout Rate:
Definition: Percentage of times an order cannot be fulfilled due to insufficient stock.
Formula: (Number of stockouts / Total number of orders) * 100
Target: Below 2%

II. Order Fulfillment

Order Processing Time:
Definition: Average time taken to process an order from receipt to shipment.
Formula: Total order processing time / Number of orders processed
Target: X hours

Pick and Pack Time:
Definition: Average time taken to pick and pack items for an order.
Formula: Total pick and pack time / Number of orders processed
Target: Y minutes

III. Stock Management

Inventory Turnover:
Definition: Number of times the entire inventory is sold and replaced in a given period.
Formula: Cost of Goods Sold (COGS) / Average Inventory
Target: Z times per month

Expiry Rate:
Definition: Percentage of expired medicines in the inventory.
Formula: (Number of expired items / Total inventory) * 100
Target: Below 1%

IV. Safety and Compliance

Adherence to Regulatory Guidelines:
Definition: Percentage compliance with pharmaceutical regulations and guidelines.
Formula: (Number of compliant activities / Total activities) * 100
Target: 100%

Safety Incidents:
Definition: Number of safety incidents within the warehouse.
Target: Zero incidents

V. Productivity

Units Picked per Hour:
Definition: Average number of units picked by a warehouse staff member per hour.
Formula: Total units picked / Total hours worked
Target: A units per hour

Orders Processed per Day:
Definition: Number of orders processed by a warehouse staff member in a day.
Formula: Total orders processed / Total days worked
Target: B orders per day

VI. Communication and Collaboration

Communication Effectiveness:
Definition: Percentage of successful communication with other departments.
Formula: (Number of successful communications / Total communications) * 100
Target: 95% or higher

VII. Continuous Improvement

Process Improvement Initiatives:
Definition: Number of initiatives taken to improve warehouse processes.
Target: At least C initiatives per quarter

Notes:
X, Y, Z, A, B, C: Set these targets based on the specific goals and capabilities of your warehouse staff, and adjust them as needed over time. This format provides a comprehensive overview of key areas for measuring the performance of warehouse staff in a retail pharmacy chain. Regularly reviewing and updating these KPIs will help ensure continuous improvement and alignment with organizational objectives.

Regards

Dear member,

I wish you had checked Google on KPIs for the pharma warehouse. Rather than asking to be spoon-fed, this forum is for raising queries about the issues faced in the execution of the knowledge.

While raising the query, you have not provided adequate information. How many retail stores are attached to the warehouse? What is the average distance, and what is the total distance from the warehouse to the retail stores? What is the frequency of the dispatches? What is the method of transportation?

Yours is not a traditional warehouse for raw materials or finished goods. The most important factor is managing inventory at the retail stores. Managing inventory means managing stockouts and the accumulation of excess inventory. So the question arises: who decides on the levels for minimum stock, maximum stock, reorder point, etc.?

Additional information is required on the number of warehouse operators and supervisors, the number of shifts, the equipment used in the warehouse, etc. To measure productivity, these details are necessary.

I ask these specific questions because I provide training and consulting in "Warehouse Management." It is easy to refer to or recommend bookish knowledge. However, improving the productivity of the warehouse or reducing the total warehousing cost requires a deep study.

Thanks,

Dinesh Divekar

Thank you, Mr. Raghunath.

@ Mr. Dinesh, of course, I have already Googled many threads regarding KPIs of warehouses. Since ours is a new kind of warehouse, I didn't find anything accurate. Also, I am not expecting anything to be spoon-fed but rather seeking better insight.

Thanks.

Hi Allmed, let me remind you that you have only asked for KPIs for a pharma warehouse. Other than that, you have not specified the type and strength of employees in the warehouse. Since you have raised a generic question, the answer will also remain generic. It is surprising to note that you are expecting a specific answer; it is strange. Please put forth your question in a proper way and expect a proper answer. Do you understand?

Thanks

Fulfillment Manager and Warehouse Head KRA

Warehouse Operations

Inventory and order tracking
Order processing
Coordinate order fulfillment
Achieve inventory accuracy
Improve operational management systems, processes, and best practices.
Ensure all operations are carried out in an appropriate, cost-effective way
Help the organization's processes
Purchase materials, plan inventory, and oversee warehouse efficiency