1) KPI indicates performance of the warehouse/DC. Performance is measured based on different indicators within a warehouse/DC which helps locating and identifying problems to alter performance level efficiently.
2) KPI highlights areas of Improvement for easier and more targeted ways to improve efficiency within warehouse/DC
3) KPI is used as a benchmark for the warehouse/DC to review their strategic plans.
Constraints of KPI
1) It is hard to measure the statistics of the warehouse/DC’s performance as it always varies and normally is only an estimate because of the generalizations.
2) Quality can only be measured in regards to damage or breakdown and it is difficult to measure for services and evaluate the interaction of supplier personnel and customers
3) It does not show reliability limits, capacity limits.
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