Like many businesses and companies, the logistics industry also puts a large value on numbers and logistics metrics through measuring Key Performance Indicators (KPIs). Understanding how well or poorly you are doing in terms of numbers says a lot about your business. Not only is data something you care about, but even your customers are more interested in the numbers than ever before. KPIs are metrics that help you analyze your performance in relation to your organization’s goals. It’s a critical fact to grasp a handful of KPIs that give you the overall story and keep things organized.
Delivery Time KPIs
A metric that is widely used is to see the ability to deliver successfully. That means that delivery must be on time and does not miss the arrival date and time window. Appointments can help determine delivery, but it’s the KPI (Key Performance Indicator) metric that will tell you if those appointments are being met or missed. 98% or higher in this metric should be the goal of your 3PL to maintain efficiency.
Shipping Time KPIs
Without shipping there would be no delivery. Therefore, an important metric to follow is how well the shipping process is getting taken care of to minimize time. This metric shows the percentage of shipments that left the warehouse on time. If you do not meet an “on-time” shipment, then you risk disappointing your customers and being seen as unreliable.
Cost Analysis Metrics
Cost is a particularly important metric because you do not want to be spending more than you need at any given junction. A cost per pound metric measures gross net with total weight that is moved each quarter or month.
In addition, the average delivery cost can tell you how much you are spending on your current delivery system. Remember that these metrics are at a glance. Figure out through these metrics if you are charging too less or staying consistent per transaction.
Another KPI and logistics metric to measure is the average and running monthly spend. This metric ensures you identify when your spending peaks in real-time and against which regions or markets. You can focus on the type of vehicles that leave you spending more so that you can utilize your fleet and make more informed decisions.
Having knowledge of inventory and the accuracy of that inventory is a powerful tool. Warehousing is essential in supply chain logistics. Pulling orders with accurate measures and correct quantities can make operations more seamless. The dock-to-stock KPIs measure the time between receipt of an order and the time that it is put away. Similarly, a fill rate metric can figure out a warehouse’s ability to process and fill an order without having to ship from multiple locations. It’s worth it for a 3PL to keep orders and systems in sync for customer satisfaction and warehouse inventory accuracy.
It’s a part of a 3PL to use advanced systems to make supply chain a smooth process. However, without logistics metrics and KPIs, you can lose sight of significant factors that make for better coordination. You need to always find ways of improvement, and KPIs can assist greatly with that. You too can become experts in such metrics.