Peak Warehouse Space Utilization

Peak Warehouse Space Utilization

KPI Details

Peak Warehouse Space Utilization measures the efficiency with which the warehouse uses its inventory storage capacity during its busiest seasons. 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, inventory replenishment processes are slow or that managers are not properly adjusting to peak seasons. Low Peak 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 capacity being used (measured in square feet) during peak seasons divided by total warehouse or facility capacity, as a percentage.

KPI Best Practices

• Analyze historical company and market data to anticipate peak demand
• Remove obsolete or unused to inventory to create space for inventory demanded during peak seasons
• Stock inventory in its designated location based on pallet size to maximize space utilization

KPI Calculation Instructions Peak 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. Only include measurements that occur during what the company defines as its peak seasons in this calculation.

KPI Formula :

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