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Revenue Per Employee

What is Revenue Per Employee?

The Revenue Per Employee refers to the average amount of revenue generated by employees.

Tracking labor costs is important, as they are often the highest non-inventory cost for a warehouse. Each employee will generate revenue through activities that keep the other KPIs where they need to be. That revenue should exceed the total amount that employee is paid (including benefits). If revenue per employee drops too low, it means your overall warehouse efficiency is at dangerous levels.

How Do You Calculate The Revenue Per Employee?

Revenue per employee is calculated by dividing a firm’s revenue on a timeline by its total number of workers in the same timeline.

Revenue Per Employee: Revenue Generated in a Time Period / Number of Employees in The Same Time Period.

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Packing Cost

What is Packing Cost?

The Packing Cost refers to the total amount of money it takes to pack a finished product.

Packing any order requires packaging, boxes, and (not to be forgotten) filler. Inventory slips, ads, coupons, and other collateral might make their way into shipments, too. Add these to the overall labor cost of packing (and any assembly required) to get your full packing costs.

By tracking packing costs, a lot of warehouses make some startling discoveries. For example, carrying a bunch of box sizes, or fancy custom packaging, can be costly. Sometimes it’s better to have a set of plain boxes of predetermined standard sizes and fill any excess space with air packs or filler. Or perhaps the time it takes to add coupons and a catalog to each shipment is not justified by the increase in re-orders. But every situation is different: you can’t know what works until you actually measure.

How Do You Calculate The Packing Cost?

To calculate your packing cost, simply add the costs of the following assets with one another: design, size, material, quantity, & any other paid asset you need to pay to finish your product packaging.

Packing Cost = Designer + Size + Material + Quantity.

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Back Order Rate

What is The Backorder Rate?

This is the rate at which incoming orders come for out-of-stock items. It usually indicates a failure to accurately forecast sales and plan ahead. Backorder rates can spike with seasonal demand, rise and fall with consumer trends, or slowly creep up if forecasts consistently underestimate sales. All are bad, as backorders break the first rule of inventory.

How to Calculate The Backorder Rate?

To calculate the backorder rate, divide the number of undeliverable orders by the total number of orders and multiply the result by 100. If your customers typically order items with multiple delivery schedules, use lines in place of orders.

Back Order Rate = (# of Undeliverable Orders ÷ Total # of Orders Placed) x 100