What KPIs to Track in Employee productivity KPIs in distribution

In the fast-paced world of distribution, measuring employee productivity isn’t just about counting the number of tasks completed—it’s about understanding how efficiently and accurately work is done across all operations. With labor being one of the biggest costs in the supply chain, tracking the right key performance indicators (KPIs) is essential to optimizing performance, reducing waste, and improving customer satisfaction.

Below are the most important KPIs to track when evaluating employee productivity in a distribution environment.

• Units Picked per Hour

This KPI measures how many units an employee can pick in an hour. It’s a core productivity metric in any distribution center, offering insights into both individual and team performance. Comparing actual rates to expected benchmarks helps identify training needs or operational inefficiencies.

• Orders Processed per Shift

This metric tracks how many complete orders a worker handles during a standard shift. It gives a broader view of productivity, combining various tasks like picking, packing, and staging for shipment.

• Accuracy Rate

Productivity isn’t just about speed—it’s about doing the job right. The accuracy rate measures how often orders are picked, packed, and shipped correctly. High productivity with low accuracy leads to returns, customer dissatisfaction, and added costs.

• On-Time Task Completion

This KPI evaluates whether employees are completing assigned tasks within the expected time frames. It’s useful for monitoring performance on time-sensitive activities such as loading outbound trucks or restocking high-priority items.

• Inventory Handling Efficiency

This includes putaway speed and accuracy, as well as how efficiently employees handle stock movements. It helps assess how quickly items are moved from receiving to storage, and from storage to shipping.

• Downtime per Shift

Tracking the amount of unproductive time during a shift—whether due to waiting for equipment, system issues, or idle time—can reveal hidden inefficiencies. Reducing downtime leads directly to higher overall productivity.

• Employee Utilization Rate

This measures how much of an employee’s scheduled time is spent on productive work. It’s especially valuable in labor planning, helping managers ensure that shifts are staffed appropriately based on workload.

• Training Completion and Competency Scores

Well-trained employees are more productive. Tracking who has completed training and how well they score on competency assessments helps link training programs to productivity outcomes.

• Pick-to-Ship Time

This KPI measures the total time it takes for an item to be picked, packed, and shipped. It provides insights into both individual performance and overall workflow efficiency.

• Employee Turnover Rate

While not a direct measure of productivity, high turnover often signals deeper issues like overwork, lack of training, or poor communication—all of which affect productivity. Monitoring this KPI helps identify when it’s time to invest in retention efforts or process improvements.

Why These KPIs Matter

Tracking the right KPIs gives managers a clearer view of how their teams are performing and where improvements can be made. More importantly, it provides a foundation for better decision-making—whether it’s updating training protocols, reallocating labor, or investing in new tools to boost efficiency.

When these metrics are monitored regularly and used in the right context, they become a powerful tool for driving continuous improvement in your distribution operations.