7 Essential KPIs for a Logistic Company

KPIs for a Logistic Company

The quality of data tracking within Logistics operations is always improving. Of course, the more data we have, the more purposeful we can use it to achieve business objectives. Trading commercial transport in Europe is currently in a difficult situation, with energy shortages and the pandemic interrupting supply chains, so it’s more important than ever to have up-to-date tracking software and the right technological outfit.

Below are 7 essential KPIs for logistic companies, along with a brief explanation of their purpose.

Order Accuracy

Order accuracy helps monitor the number of incidents from the placement of an order to the delivery of the shipment. In other words, it helps measure order pick accuracy by looking at the inventory on hand. Time, production, and sales can all suffer from lackluster order accuracy.

Lead Time

Lead time is a vital KPI that reflects order cycle time. This is the measure of the time between customers placing orders and when they receive them. Tracking the time it takes for operations to last can help identify bottlenecks, highlights areas where optimisation is needed.

Stock Rotation

Stock rotation measures how many times in a given period that a company sells a certain product. This helps identify fast-selling products and is very important in staying competitive. Stock rotation is often called inventory turnover.

Warehouse Costs

Warehouse costs are a selection of metrics that evaluate the expenses of a given warehouse. Taking into account the labour, bills, capital, and delivery/shipping costs that are incurred from getting goods in and out of the warehouse. The warehouse costs KPI can help determine the efficiency of a warehouse operation and is crucial to profitability.

Perfect Order

The perfect order ratio is exactly what it sounds like – it’s the rate at which orders are successfully shipped without a single issue (i.e. no delays, damage, and is the exact inventory). This can help assess customer satisfaction and operational accuracy.

Average Days Late

The average days late KPI is the tracking of the days between the expected delivery date and the real date that the customer receives the order. This can help determine just how late the deliveries are, and subsequently the customer satisfaction. This is a key metric when struggling with customer retention/loyalty, but it can also give a good insight into the delivery process and its inefficiencies.

Transportation Costs

Transportation costs are a selection of metrics that track the order’s price from the beginning to the end. These costs include things such as inventory carrying costs, order processing, transportation costs, among others. In a time with current rising transportation costs, this is a very topical and relevant metric to help a handle on in order to retain profitability.

Final Word

Logistics is an industry that heavily relies on KPIs to track efficiencies and performance. There are, however, many more KPIs for the logistic industry. It’s important to improve the way the data is tracked and assessed too, as a lack of data tracking can be a significant factor in lackluster performance.