KPI in logistics

Logistics is an essential activity for the operation of any company, as it is responsible for planning, organizing and controlling the flow of materials, products and information from origin to destination.

However, efficient logistics management is no easy task, as it involves many factors, processes and players that can affect performance and customer satisfaction. It is therefore necessary to measure and evaluate logistics performance using indicators that make it possible to identify the strengths and weaknesses of the supply chain in order to implement the necessary improvements.

These indicators are referred to as Key Performance Indicators (KPIs). In this article we will explain what they are, what function they have and how they are calculated.

Let’s take a look at this!

What are KPIs in logistics and what is their function?

Logistics KPIs are indicators that measure the performance of a company’s logistics processes and activities. They are usually expressed as a percentage, a ratio or a specific number and are defined for a specific period. Its main task is to:

Objective evaluation of the development of a logistical process or activity.

✓ Compare the results achieved with the defined business objectives.

✓ Base decisions on data and evidence.

The logistics indicators are broken down into the main areas of logistics: Procurement, warehousing and transportation or distribution of goods. Since they have to measure the achievement of targets, they always refer to these:

  • Operating costs: Manufacturing products at the lowest possible cost.
  • Time: Increasing the speed and punctuality of processes.
  • Productivity: Producing more with fewer resources.
  • Quality or level of service: meeting the expectations and needs of customers.

Importance of KPI monitoring in logistics

Tracking key performance indicators (KPIs) is crucial for logistics professionals as they serve as a compass to guide their departments towards efficiency, profitability and ultimately success.

In the complex world of logistics, where every minute and every resource counts, KPIs provide valuable information on various aspects of operations.

The most important priorities of logistics managers include, for example, ensuring on-time deliveries, maintaining product quality and effective cost management. Problems in one of these areas can have a significant impact on financial results.

Types of KPIs in logistics and how they are measured

In logistics, the most common key indicators are defined taking into account the various stages of the supply chain. Some of the most important are:

Procurement KPIs

They are used to monitor the procedures for purchasing new goods and negotiating with suppliers.

These KPIs enable an evaluation:

✓ Quality.

✓ Costs.

✓ Delivery time of the purchased products.

Some examples of delivery KPIs are:

Failed deliveries received

Calculates the percentage of unsuccessful orders due to the supplier’s failure to meet the agreed service or product quality.

The formula is: rejected orders ÷ total number of orders received x 100.

Lead time of the order

This indicator calculates the time that elapses from the time the purchasing department requests an order from the supplier until the order is received in the warehouse.

The formula is: date of receipt of the order – date of issue

Transportation KPI

They are important performance indicators that not only provide data on deliveries, but also on the entire movement of products in the supply chain. However, these key figures are useful for evaluating fuel costs, transport efficiency, quality and service.

Some examples of transportation KPIs are:

Transportation costs in relation to sales

It shows how high traffic expenditure is in relation to total sales and helps to understand how traffic affects the company’s profit. It also makes it easier to find ways to reduce these costs.

The formula is: total transportation costs ÷ turnover.

Punctual deliveries

This key figure shows the transportation costs in relation to total sales and thus provides valuable information about the influence of transportation on the company’s profitability, so that opportunities to reduce costs can be identified.

The formula is: number of deliveries within the period ÷ total number of deliveries x 100.

KPIs for storage

As the name suggests, they can be used to measure and monitor processes in the warehouse, such as goods receipt, storage and dispatch of goods.

Some examples of transportation KPIs are:

Storage costs per unit

Shows the costs for storing the goods in the warehouse.

The formula is: total cost of storage ÷ nominal capacity x occupancy rate

Internal order throughput time

Measures the time required to fulfill an order from receipt to dispatch.

The formula is: number of orders completed on time ÷ total number of orders x 100

These are just a few examples of KPIs in logistics, but there are many more. Each company should select the indicators that best meet its objectives and needs. To this end, it is important that it defines clear objectives, collects relevant data and regularly reviews its performance. You can then assess whether you are meeting your expectations or whether you need to take corrective action.


Ähnliche Artikel

Kontaktieren Sie uns für weitere Informationen

Wir beantworten alle Fragen zum internationalen Transport

Wir bewerben uns bei Ihnen als Arbeitgeber!