Distribution Center Expense per Case

Distribution Center Expense per Case

KPI Details

Distribution Center Expense per Case measures the expense incurred by a company's distribution center in relation to the number of cases or pallets delivered to customers over the same period of time. High values for this metric can be indicative of highly manual (i.e., error and rework prone) distribution processes and procedures related to case or pallet picking and preparation (e.g., warehousing, inventory control, picking and packaging processes that are almost entirely managed through manual labor), overstaffing, general inefficiencies within distribution processes (e.g., inaccurate demand forecasting methods, inefficient customer order documentation, poor inventory management, etc.), and sub-par distribution employee training and performance. While companies typically seek to streamline operations and employee positions to reduce expenses in the Distribution Center, great care should be taken when doing so as too many layoffs can have a negative impact on company morale and make it difficult to provide timely distribution services.

KPI Definition

The total expense incurred by a company's distribution center (e.g., expense focused on receiving shipments, warehousing, sorting, inventory control, picking, etc.) divided by the number of cases or pallets delivered to customers over the same period of time.

KPI Best Practices

• Reduce stocking levels where possible to minimize inventory carrying costs
• Employ part-time workers when appropriate to minimize benefits costs
• Cross-train employees to avoid overstaffing the warehouse

KPI Calculation Instructions Distribution Center Expense per Case?

Two values are used to calculate this KPI: (1) the expense incurred by a company’s distribution center (e.g., expense focused on receiving shipments, warehousing, sorting, inventory control, picking, etc.), and (2) the number of cases or pallets delivered to customers over the same period of time. Include labor (wages, salaries, commissions, benefits), and technology (hardware, software, etc.) costs in the numerator. Do not include overhead costs (occupancy, utilities, supplies, advertising, legal fees, travel costs, etc.) in this calculation.

KPI Formula :

Total Distribution Center Expense Incurred / Number of Cases or Pallets