Management and Overhead Expense per Case

Management and Overhead Expense per Case

KPI Details

Management and Overhead Expense per Case measures the total distribution overhead and management-related expenses (salaries, utilities, etc.) incurred by the company in relation to the number of cases or pallets delivered over the same period of time. High values for this metric can be indicative of management overstaffing, general inefficiencies within distribution management processes (e.g., inaccurate demand forecasting methods, poor tracking of distribution center employee performance, poor inventory management, etc.), and sub-par distribution manager performance. While companies typically seek to streamline operations and managerial positions to reduce expenses in the Distribution Center, the overall number of managerial positions should be balanced with the level of management being provided, as the quality of management may impact employee productivity and company operational efficiency.

KPI Definition

The total distribution overhead and management-related expenses (salaries, equipment, etc.) incurred by the company divided by the number of cases or pallets delivered over the same period of time.

KPI Best Practices

• Warehouse managers have a wider span of control
• Invest in more efficient warehouse lighting systems to reduce utilities expenses
• Use industrial fans to increase airflow and decrease energy used for air conditioning

KPI Calculation Instructions Management and Overhead Expense per Case?

Two values are used to calculate this KPI: (1) the total distribution overhead and management-related expenses incurred by the company, and (2) the number of cases or pallets delivered to customers over the same period of time. Include management-related labor (wages, salaries, commissions, benefits) and distribution-center overhead (occupancy, utilities, supplies, advertising, legal fees, travel costs, etc.) costs in the numerator. Do not include freight, logistics or other warehouse operational costs in this calculation (receiving, sorting, picking, inventory, etc.).

KPI Formula :

Total Management-Related and Overhead Expenses Incurred / Number of Cases or Pallets Delivered