Logistics KPIs - Metrics - Explore The Best Logistics KPI Examples

KPI Examples for the Logistics Industry. Logistics Key Performance Indicators and Metrics. ✔ See different templates & designs ✔ Find & track the right logistics KPIs to meet your corporate objectives. A logistics KPI or metric is a performance measurement that is used by logistics managers to track, visualize and optimize all relevant logistic processes in an efficient and transparent way. Among others, these measurements refer to transportation, warehouse and supply chain aspects. Here is the complete list of the most important logistics KPIs and metrics, that we will discuss in this article in every detail: Shipping Time : Spot potential issues in your order fulfilment process Order Accuracy : Monitor the degree of incidents Delivery Time : Track your average delivery time in detail Transportation Costs : Analyze all costs from the order placement to its delivery Warehousing Costs : Optimize the expenses of your warehouse Number of Shipments : Understand how many orders are shipped Inventory Accuracy : Avoid problems because of inaccurate inventory Inventory Turnover : Track how many times your entire inventory is sold Inventory to Sales Ratio : Identify a potential overstock. Shipping Time. The On-Time Shipping performance refers to the ratio of orders that have been shipped on or before the requested ship date divided by the total number of orders. This is a first logistics KPI to help you measure your supply chain performance. Indeed, if the amount of time between the moment the customer placed his order and the moment that order is prepared to be shipped is too long, that can show some trouble in the process that need to be fixed. Whether it is outdated planning processes or disconnected execution systems too slow to face an increasing demand, the issues need to be addressed to quickly answer unexpected events. Performance Indicators. After realizing a benchmark of the average time you need to ship a certain type of order, you can set a target shipping time relative to each product to achieve. Order Accuracy. The Perfect Order Rate is another highly important logistics metric when it comes to your supply chain efficiency. It measures the amount of orders that are processed, shipped and delivered without any incidents on its way. The shipping time as well as the delivery time are both respected, the order is not a wrong one and the goods are not damaged. It is important as it shows the efficiency of your supply chain and delivery services, and that leads of course to more satisfied clients that are willing to come back or recommend your services. Performance Indicators. The higher is this rate, the better it is for your business. You will lose less money with returns of inaccurate or damaged goods, and increase the level of satisfaction of your customer base. Delivery Time. The Average Time Delivery is measured from the moment the order is placed to be shipped and the moment it is delivered to the customer/post office. After benchmarking and having an idea of the average delivery time from your warehouse to anywhere, the goal would be to decrease it when possible - offering special delivery services for instance - but more importantly, to precise it. Saying that an order will arrive in 4-5 business days is better than saying it will arrive in 1-to-5 business days. Additionally, if you can precise the delivery hours (between 13h and 15h rather than between 8h and 18h), it is even better. That way, your customer knows when he should be home to pick the package up, increasing your order picking accuracy rate and avoiding returns. Performance Indicators. This is a typical logistics KPI example to narrow down and precise as much as possible for a better service. Transportation Costs. The Average Transportation Costs calculates an overall of the expenses involved in processing an order from the beginning to the end. It will break down all the costs related to this logistics KPI according to distinct categories: the order processing, the administrative, the inventory carrying, the warehousing and finally the actual transportation costs. After calculating all these, you can evaluate the percentage each stage of the process represents and see if that is excessive or in the norms. You can also calculate the transportation costs relatively to a product and see how much one item costs compared to how much revenue it brings you. Performance Indicators. The goal is to decrease the transportation costs while maintaining a high quality of delivery. Warehousing Costs. Warehousing is the management of space and time. The Warehousing Costs refer to the money allocated to the goods moved into or outside the warehouse. These expenses cover equipment and energy costs like ordering, storing and loading the goods, as well as more human costs like labor, shipment, or delivery. The warehousing costs are a component of another logistics KPI, the total transportation costs. Measuring them is not an easy task, but once it is done it will facilitate your overall management and add a lot of value, something that senior management or investors will appreciate. Performance Indicators. Warehouse being the main area of your business, it is important to measure and review the costs on a regular basis, so as to improve your operations and evaluate such improvement. Number of Shipments. Shipping is not only a matter of dispatching goods and packages in trucks or boats. Shipments are the showcase of your warehouse; their quality and the accuracy to primary order will demonstrate the quality of your service as well. The same way you measure the number of orders placed ready on time to be shipped (On-Time Shipping KPI), you can measure the number of orders shipped out of your warehouse. Analyzing the trends over time will provide great insights on rush hours or rush seasons (such as Christmas time), and enable you to anticipate and allocate more resources accordingly. Performance Indicators. Breaking down this figure into several categories (countries, regions, types of products) will provide you greater information that you can use to optimize other logistics metrics, like the ones related to delivery. Inventory Accuracy. Inventory Accuracy is one of those logistics metrics that can make or break your warehouse. Indeed, having a certain record of all your goods in your database that doesn’t match the actual physical inventory can harm your business considerably. If your inventory is inaccurate, that can lead to unexpected backorders but also unsatisfied customers and more generally, higher overall costs. A regular inventory checking the existing discrepancies with your electronic inventory record ensures that bookkeeping practices are in order and that your business is reliable, avoiding phantom inventory nightmares. This ratio will also help you spot issues related to receiving, shipping, or accounting. Performance Indicators. On a more realistic level, it is also normal to have some disparities between the record and the warehouse, but the idea is to maintain that ratio over 92% as much as possible.