Top Operational KPIs and Metrics for Logistics Business
Logistics is like the unsung hero of supply chain management. It's all about making sure stuff, whether it's goods, services, or info, gets from where it starts to where it's needed, all based on what customers want.
Think of logistics management as the glue that holds the supply chain together. It's about juggling things like physical stuff (materials, equipment, snacks), making sure they go where they're supposed to, and even handling returns if needed.
Why is logistics hard to maintain?
Keeping just the right amount of inventory on hand can be tricky, especially when you're trying to make sure you've got enough products available for your customers without spending too much money.
Logistics companies have got a tough job here. You need to strike a careful balance between a few key things: how much it costs to store their inventory (you don't want to be paying for space you don't need!), getting a good handle on predicting what their customers are going to want, and figuring out the best way to restock those shelves without overdoing it or running out of stuff. It's all about finding that sweet spot where everything lines up just right.
What are some of the top KPIs I must measure for logistics?
Numerous metrics can be measured and everywhere there are numbers involved, KPI metrics can be formed. But from a logistics business perspective, measuring KPIs broadly in the following categories should be a good place to start:
- Financial Logistical KPIs
- Supply and Inventory Logistics KPIs
- Transportation Logistics KPIs
- Delivery Logistics KPIs
Let's dive deeper into these, to understand the different kinds of KPIs
1. Financial Logistical KPIs
1.1 Pick and Pack Costs
1.2 Operating Ratio:
1.3 Net Profit Ratio:
1.4 Inventory Turnover Ratio:
1.5 Financial Leverage:
1.6 Inventory to Sales Ratio:
2. Supply and Inventory Logistics KPIs
2.1 Warehousing Costs:
2.2 Capacity Utilisation:
2.3 Pick and Pack Cycle Time:
3. Transportation Logistics KPIs
3.1 Truck Turnaround Rate:
3.2 Average Wait Time:
4. Delivery Logistics KPIs
4.1 Order Cycle Time/Lead Time:
4.2 Delivery Time:
4.3 On-Time Pickup:
4.4 Cost Per Pound:
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