For a healthy supply chain that keeps your cash register ringing, you need to factor in whatever happens in each phase of a shipment’s journey. Continuous learning through deep introspection into everything, like from your bills done to on-time deliveries, illuminates the cracks that make efficiency slip easily. As a resolution, you need accurate and targeted tracking to scope further improvements within the demand-supply link.
For this, setting standard KPIs within your supply chain can be a real-life and defined way of assessing the performance. Besides facilitating strategic decision-making, it allows you to flex and operate in an agile way to offset the challenges specific to your goods flow. Nonetheless, it’s not enough to set KPIs and track your supply chain, but that you pick the right ones – ones that speak directly to your business.
On the flip side, it’s very important that you don’t go overboard, set too many metrics, and end up throwing a wrench into your own business. This is where the industry-famous practice called the SMART approach holds up its end of the bargain. SMART doesn’t embody any relative intelligence but is an acronym used across business communities to gauge the potential metrics that matter for your business. Your business KPIs are SMART, only if they are:
Specific: List out the “who, what, where, when, and why” of your selected metric. Aim for more granular detail.
Measurable: All your metrics should be quantifiable and come with a relevant figurative expression to track variations tangibly. For example, instead of “we expect more milk-runs this year from some of our large retail customers,” be like, “we’re aiming to introduce 15 new trade lanes for frequenting to 5% of our retail customers.”
Achievable: It’s no harm to set lofty business goals, but the real question is how feasible they’re to meet. Neither lose yourself in the tangle of what other businesses are doing, nor shoot for the moon. Be true to your business.
Relevant: For one thing, your KPIs should be in concert with your current operations and the roadmap as well. For example, if you’re unable to maneuver the supply side of your business, it’s advisable not to set metrics related to materials acquisition.
Timely: Same thing again. Set your target as realistically as possible so that it’s highly likely to meet it on time. And a relatable timeline benefits your team with a set window to properly plan and scope out newer possibilities.
Here are 10 iconic supply chain KPIs that measure business success within the freight industry. But each to their own, while choosing your KPIs, be SMART!
Freight invoice exactness:
Freight bills must be consistently accurate to keep your business high and unwanted headaches low. Incorrect information regarding weight, trade lanes often lead to reclass fees, overhead expenses, and more.
Perfect order index:
This metric factors in the percentage of your orders that are error-free completely. It considers each phase of a PO: procurement, production, transportation, and warehousing, and best spots the levels that require improvements.
Tracking the number of orders that arrive at the destination on time helps you visualize the weak spots in your supply chain. Picture this: you’re constantly facing late pickups that are affecting your last-mile deliveries with lesser on-time deliveries. Probably, that’s another KPI for you to track.
Customer order cycle time:
Order cycle time is how long the process takes to deliver to the customer finally from the time they made the initial PO. Very close to the on-time delivery KPI – the more late shipments, the higher the cycle time.
Tapping on your fill rate helps you realize what percentage of your customer demands could be met by your immediate stock availability. Simply put, how much you can fulfill with the first truckload that you set out.
Overpromising often wins you short-term benefits and probably an amount of credibility. But on the delivery window, it can make way for disappointed customers and ultimately zero business. Always track the average or telltale transit time once the truckload commits its journey till it hits the destination. This way, you can forecast the best possible time for a delivery.
Each moment matters when your shipments are about to get moved. The faster the loading/unloading time, the quicker those trucks ready up for the next journey. Efficient loading/unloading processes save up costs down the road.
Mainly critical for the carrier or transporter side of the freight equation, this KPI is of great value as trucks and equipment tend to get operated in rugged conditions and endure rougher wear and tear. Maintenance is needed to ensure good asset health. Thus, it’s vital to figure out where a large part of your maintenance cost goes.
Sound knowledge of “how” and “why” damage occurred is the first set of guard rails to protect a business from damage. Oddly enough, you might find out that sending your truckload on a specific trade route ends up with damaged deliveries. In this case, you would reroute the future deliveries to sideline this bottom line-impacting scenario.
Fuel orders and the output hold answers for crucial operations-related questions that determine performance. Is it too much fuel ordering for what you really need? What about optimizing the weight/size of your shipments to increase fuel performance? How on-point is your loading/unloading, or are trucks wasting fuel by idling?
By the look of it, all this might pose a heavy lifting to have these KPIs operational. The good news is digital freight platforms can go a long way to meet all these requirements. For instance, the TruKKer platform provides businesses with instant quotes for their most frequented lanes on booking. The underlying AI and ML mechanisms are fully equipped to predict loads and assign the most efficient transport in real-time. Further, it minimizes empty miles through accurate prediction of the arrival time of different trucks, freight and clusters deliveries depending on the geo-location and destination. Better asset utilization and lesser vehicles on the road are some of its immediate benefits. Most importantly, this also helps us increase productivity by up to 20%.
Another key aspect of the platform is a reliable ETA. It is the output of the same live track-and-trace capabilities that empower businesses with optimum control and better agility in handling exceptions with well-defined corrective actions. A reliable ETA also fosters a relationship fully based on trust between a business and its customers through an uninterrupted flow of real-time and accurate information. TruKKer’s platform exactly does that by enabling auto-alerts (order location, status) and channeling them to the users’ preferred digital devices. Shippers benefit from on-time last-mile and FTL deliveries, and retailers stack up their shelves, machines in a factory start churning profits, and more. Thanks to our largest digital land freight network in the MENA region.