Blog

Essential logistics KPI`s that you should consider for your business

Written by Francisca Howard | Sep 20, 2017 3:00:00 AM

If you are already using a fleet optimization software for your company, you have taken an important step in the path to grow your business. But sometimes controlling so many variables and indicators can create confusion and even move you away from your real objectives.

In order to avoid this, it’s important to consider that every industry or business has its own indicators of success, depending on the nature of the products or services of each company. Even the type of customer is a variable to consider.

The Inbound Logistics website provides an example: “Customer A might define on time as pickup within three hours, delivery within one hour, but Customer B might define on-time pickup or delivery as within 24 hours. The same carrier might earn a mediocre score for its work with Customer A but an excellent score for Customer B.” says Tom Nightingale, Vice President, transportation logistics at Pittsburgh-based 3PL GENCO, a subsidiary of FedEx.

Now, there are some basic Key Performance Indicators (KPI’s) that work well for almost any industry or business, because they are based on three essential principles: capacity, safety and accuracy. According to a shipper at the Inbound Logistics website, it also “helps shippers quickly identify opportunities and allows them to react to them faster than ever before."

Let’s review some basic fleet management KPI's or logistics KPI’s that you may want to consider for your business:

1. On-Time Delivery

This is the final and most important step because it involves the customer’s satisfaction, one of the keys for brand positioning. Remember that a brand isn’t what the company thinks about itself, but what the clients think about the company.

2. On-Time Shipping

A very important indicator that shows you if the internal operation is working properly. A shipping process that works on time is considered by many companies responsible for up to 50% of the process success. The remaining 50% is on-time delivery, our first KPI.

3. Inventory accuracy

This KPI helps you in two different ways. First, you can minimize the inventory losses, which is one of the main headaches of warehouse managers. On the other hand, it contributes to minimize the amount of customers that get disappointed when they buy something that turns to be out of stock.

4. Order Accuracy

If all of your orders are filled properly and without mistakes, it will help your business reduce the number of returned orders for several reasons. This is another important factor to consider for customer satisfaction and brand positioning.

With this in mind, how are you managing your fleet? Is it really contributing to your brand´s positioning in the market? Let me know by leaving a comment below.

Other interesting blogs:

How to choose a Transportation Management Software for your company

How visibility in your supply chain can help you overcome a crisis

How fleet tracking systems improve customer experience

The importance of metrics for logistics managers