The Metrics CFOs Actually Care About in Distribution Centers

Operations loves productivity metrics like cases per hour, pick rate, and dock turns.
CFOs don’t.

CFOs care about:

• Profitability
• Predictability
• Risk

The disconnect? Operations reports activity. CFOs measure return.

To secure investment, headcount, or automation budget in 2026, distribution center leaders must learn to translate operational metrics into financial impact.

The CFO Priority Shift

Traditional warehouse KPIs track motion and effort. Finance tracks value creation.

Here’s what that means in real terms:

If the metric doesn’t move cost-per-case, EBITDA, or cash flow,
a CFO won’t care.

The “Big Five Metrics” CFOs Care About

✅ 1. Cost Per Case (CPC)

KPI: Total labor cost ÷ total cases processed

This is the warehouse profit metric.

CFOs use CPC to determine:

• Whether labor spend is scaling with volume
• Whether automation is justified
• Whether to outsource or internalize labor

Lower CPC = higher EBITDA.

Why managed labor matters:
FHI improves CPC because productivity and retention are already baked into the operating model — no rehiring, no retraining, no OT inflation.

✅ 2. Labor Variance (Actual vs. Expected)

If CPC tells you how much each case costs, labor variance tells you whether the labor plan is working.

High variance means:

• Overtime band-aids
• Turnover chaos
• Forecasting failures

Managed labor eliminates variance by tying output to a fixed-price model.

✅ 3. Throughput per Labor Hour (TPLH)

KPI: Total units / total labor hours

TPLH shows how well labor is being utilized, not just how many people are on the floor.

Improved TPLH → lower CPC → better EBITDA.

CFOs don’t want more people.
They want more output from the people they already have.

✅ 4. Retention / Turnover Cost

It costs 30–50% of a warehouse employee’s annual wages to replace them.

Turnover isn’t merely an HR issue — it’s a financial liability.

CFOs know:

• High turnover increases CPC
• Low retention destroys productivity
• OT rises when headcount falls

FHI’s managed labor model reduces turnover 2–3x over temp labor, stabilizing cost.

✅ 5. Productivity Ramp Time

KPI: # of days to reach expected cases/hour

CFOs ask:

• “How long until this labor investment produces ROI?”
• “How consistent will output be?”

Managed labor accelerates ramp time because onboarding and coaching are handled onsite.

Translating Ops Speak → CFO Speak

CFOs don’t want activity.

They want a dollarized storyline.

Why Managed Labor Speaks to Finance

Because managed labor converts labor spend into a fixed, predictable cost structure, CFOs get:

• Forecastable labor spend
• Lower CPC
• Reduced labor volatility
• Faster ramp to productivity
• No hidden overtime inflation

At one high-volume grocery DC, shifting to a managed labor model reduced CPC by 13.2% while increasing TPLH by 11.5% in the first 60 days.

That is finance language.

CFOs don’t care how hard your team works.

They care how efficiently your operation converts labor into profit.

If the metric:

✅ Reduces CPC
✅ Decreases variance
✅ Improves retention
✅ Accelerates throughput

Then you have their attention.

FAQ / Q&A

Q1: Why don’t CFOs care about CPH or pick speed?
Because speed doesn’t guarantee profit. CPC does.

Q2: What metric should I lead with in budget discussions?
Cost-per-case. It’s the warehouse version of gross margin.

Q3: How does managed labor reduce CPC?
By improving retention, throughput consistency, and shift-level accountability.

Q4: How do I show CFOs the ROI of managed labor?
Convert throughput improvements into CPC reduction and annualized cost savings.

Q5: What matters more — productivity or consistency?
Consistency. CFOs invest in predictability.

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