Warehouse Space Utilization

Warehouse Space Utilization

KPI Details

Warehouse Space Utilization measures the efficiency with which the warehouse uses its inventory storage capacity. Low values for this KPI may suggest that the warehouse is too large, inventory is being stored in improper places, demand forecasting is not accurate or that inventory replenishment processes are slow. Low Warehouse Space Utilization is going to be costly to the company due to facilities, overhead and utilities costs that are not being used to generate revenue. Companies that do not make the most of their warehouse space also risk having stock-outs for customer orders.

KPI Definition

The amount of warehouse space being used (measured in square feet) divided by the total warehouse or facility space, as a percentage.

KPI Best Practices

• Use narrow aisles in warehouse facility to increase potential storage space
• Stock inventory in its designated location based on pallet size to maximize space utilization
• Accurate demand forecasting to minimize stock-outs and reduce empty warehouse space

KPI Calculation Instructions Warehouse Space Utilization?

Two values are used to calculate this KPI: (1) the amount of warehouse space being used (measured in square feet) at the time of measurement, and (2) the total warehouse or facility space/capacity. Warehouse space is in use if it is storing goods/materials for future shipment at the time of measurement. Only include floor space in this calculation. Do not include cubicle space in this calculation.

KPI Formula :

(Amount of Warehouse Space Used / Total Warehouse Space) * 100