Channel Design & Management
The Channel Management Office is authorized to produce and develop marketing and distribution channels. They also maintain relationships with brokers or channel partners
Related: Channel Manager, Manager of Channel Sales, Channel Marketing Manager, Channel Program Manager
- Number of Distribution Employees – The total number of full time equivalent (FTE) staff directly engaged in the distribution task
- Sales Channel Density – An assessment of the number of possible clients reached by distribution agent or intermediary
- Distribution Center Segmentation – The means by which the firm sets up its distribution facilities: by product type, by client/account, by distance to clients
- Order Tracking Capabilities – A yes/no metric showing if the distribution estimation office gets order shipping information (delivery dates, types of interruptions, accuracy) in real-time
- Real-Time Tracking Capabilities – A yes/no metric showing whether the firm has the ability to locate its transportation courier at any particular time for outgoing or internal transportation
- Distribution Channels Used – The manner by which the form delivers finished items: via third-party vendors, straight to client, straight to consumer
- Number of Distribution Centers – The total number of distribution facilities (both privately operated and outsourced) in operation.
- Delivery Cycle Time – The average number of hours needed to distribute merchandise and/or materials from port to port
The Fleet Management Office is in charge of the maintenance of the company’s properties that physically transfers products from producers to consumers or brokers (a third party who serves as a medium for products offered by the producer like a retail outlet)
Related: Fleet Manager, Driver, Fleet Maintenance Manager, Fleet Procurement Manager, Operations and Logistics Manager
- Preventative Maintenance Compliance – The percentage of transportation vessel properties that are updated and on schedule on all expected precautionary maintenance jobs and inspections versus the total number of vessel properties
- Maintenance Coverage Rate – The percentage of costs related to repair and maintenance of vessels that are protected by warranty or by insurance versus the total vessel repair and maintenance expense
- Maintenance Failure Records – A yes/no metric showing whether the records of non-standard maintenance efforts are kept for each vehicle, including an explanation of the work done
- Fleet Accident Frequency – The average number of driver mishaps per 100,000 driving hours acquired by the firm’s fleet
- Average Age of Fleet – The average age (in years) of the vehicles in the firm’s transportation assets
- Average Mileage of Fleet – The average number of miles on vehicles in the firm’s transportation assets
- Fleet Utilization Rate – The percentage of actual time all transportation assets are utilized versus the total time they are ready for usage
- Average Number of lining Hours – The average number of lining hours recorded by drivers and vehicle operators over the duration of one year
- Scheduled Equipment Maintenance – The total number of hours consumed on regular, expected maintenance for the company’s line of vehicles in a particular year
The packaging team is in charge of designing and preparing the packaging for finished products. They make sure that products are properly kept safe and stored for shipment and dispersal
Related: Packaging Engineer, Packaging Designer, Packaging Auditor, Packaging Specialist
- Percentage of Packages with Correct Documentation – The percentage of packages transported with the right documentation (e.g. packing lists, bill of materials) versus the total number of packaged transported during a specified time period
- Percentage of Products Damaged during Shipping – The percentage of merchandise that were spoiled at some point during the transportation process as a result of deficient packaging or storage
- Drop Test Use – A yes/no metric showing whether the firm has executed protocols for packaging drop tests (i.e. drop packed merchandise from a specified height to evaluate packaging quality)
- Packaging Weight as a Percentage of Total Product Weight – The percentage of the weight of the merchandise packaging versus the total weight of the packaged merchandise upon transportation
- Quality Control Inspection Standards – A yes/no metric showing whether a regular packaging quality control procedure is executed before packages are transported
- Shipping-Related Defect Rate – The percentage of the yearly number of product damage due to shipping-related issues versus the total number of merchandise transported
Third Party Logistics Management (Qualitative)
Businesses usually hire third party logistics (3PL) for their storage and shipping duties. These are firms that’s offer supply chain services according to current market conditions and customer requirements.
Related: Logistics Coordinator, Logistics Data & Business Analyst, Logistics Manager
- Reasons for Outsourcing Internal Logistics Function – The main issue specified by the firm for outsourcing the internal logistics task: costs, processing capacity, better cycle times,lesser shipping related damages, or other
- Reasons for Outsourcing Outbound Logistics Function – The main reason specified by the firm for outsourcing the transportation task: cost consideration, greater processing capacity, improved cycle times, reduced shipping-related defects, or other
Third Party Logistics Management
- Carrier Performance tracking – A yes/no metric showing whether the firm needs individual carriers to monitor each of the following transportation-related glitched: number of deformities per shipment, number of shipments resulting in damages, number of shipments resulting in charges
- Inventory Accuracy – The percentage of correct inventory data stored within the warehouse management system (WMS) versus the total amount of inventory data within a third-party logistics warehousing properties
- Customer Fill Rate (Third Party) – The percentage of client orders that third-party storage and distribution providers meet accurately (on schedule, in correct amount, in good condition) versus the total number of orders they meet
- Internal Logistics Outsourcing – A yes/no metric showing whether the firm employs a third-party merchant to conduct internal shipments (e.g. manufacturer to warehouse/distribution facility)
- Outbound Logistics Outsourcing – A yes/no metric showing whether the firm employs a third-party merchant to conduct outgoing shipments (i.e. to clients, consumers)
- Cost of Shipment per Product – The total expense of transporting merchandise for outgoing shipments through a third-party logistics and transportation provider divided by the number of merchandise transported
- Transportation Management System (TMS) – A yes/no metric showing whether the third-party logistics providers have transportation management systems (TMS) employed
- Warehouse Management System (WMS) – A yes/no metric showing whether third party logistics providers have warehouse management systems (WMS) employed
Logistics Health & Safety
The logistics health and safety office is in charge of giving a workplace that is secure for the workers. They also make sure that the delivery and disposal practices adhere to administrative requirements
Related: Logistics Safety Manager, Safety Supervisor, Compliance Planner, Distribution Compliance Officer
- Average Number of Days Between OSHA Incidents – The average number of days between Occupational Safety & Health Administration (OSHA) events at the distribution center that meet the general recording criteria.
- OSHA Recordable Incident Rate (RIR) – The number of OSAHA incidents that meet the general recording criteria multiplied by 200,000 and divided by the total number of hours worked for a specified term
- Sanitation Procedures – A yes/no metric showing whether a regulated group of guidelines for the disinfection of distribution centers are in place (especially relevant with perishable goods distribution facilities)
- Health & Safety Training Hours – The average number of hours each employee gets related to workplace health and safety over a specified term (e.g. quarterly, yearly)
- OSHA Hours Away from Work – The percentage of work hours wasted due to OSA cases versus the total hours worked over a specified term
Transportation Objectives or KPIs are designed to measure job efficiencies in the transportation industry. They provide a snapshot of the operational health, giving shippers and logistics companies’ management the information to make the right decisions to implement measures to improve employee efficiencies and capabilities.
- Improve labor productivity – This transportation management KPI relates to how productive employees are. Labor productivity is directly related to the success of the logistics company’s operations. And it affects the receiver’s ability to earn a living. The higher the productivity rate, the greater the number of shipments fulfilled.
- Improve on-time pick up and delivery – Adhering to the advertised schedule for pickups and deliveries is essential for organizational success. If a customer has booked and paid for a collection or delivery at a specific time, the driver must arrive on time; otherwise, it will be seen as bad customer service, resulting in lost clients.
- Improve revenue yield – Each shipment generates an overall yield. It is important to track and monitor this metric because it influences the company’s profitability metrics. This yield can also be broken down to determine where delays and unnecessary costs are eating into the shipment’s profit.
- Improve fuel efficiency – It is vital to measure and track the fuel efficiency metric. Federal agencies mandate reporting and compliance to environmental initiatives for fewer emissions and fuel use. And the more fuel-efficient trucks, the lower the fuel costs, the lower the cost of sales, and the higher the company’s profit.
- Improve maintenance costs – Every freight and shipping company will have maintenance costs. Trucks and equipment must be maintained to meet the minimum road worthiness requirements. It is essential to keep these costs as low as possible without compromising on driver and customer safety.
- Improve miles driven outside a predetermined route – Route costs are included in the cost of the collection or delivery. If the driver travels outside the predetermined route, the route cost will increase. The cost of sales will increase, reducing the company’s profit. It is essential to ensure that unaccounted for mileage is not added to each trip.
- Improve border delays – Delays, including random inspections, problems with paperwork, or traffic delays, especially cross-border delays reduce the per-mile yield and lengthens the time of transit, increasing the risk of late deliveries, increasing the cost of sales, and reducing the company’s annual profit.
- Improve loading or unloading time – The longer it takes for a shipment to be loaded or unloaded, the more time is taken at a customer. This reduces the company’s efficiencies and increases shipment costs. The driver will also be late for all other scheduled deliveries, resulting in the need to reroute existing shipments.
- Reduce the cost of damages – The cost to company for damages can be substantial, especially as a result of natural or human-made disasters. Despite unavoidable disasters, the company must keep the loss due to damages to trucks and equipment as low as possible.
- Focus on safety – The cost of accidents and injuries can be substantial over time if not measured. It is critical for the business organization to be proactive when it comes to safety, including implementing warehouse safety protocols, safety measures when loading and unloading trucks, and best-practice driving protocols.
- Improve the collaboration and partnership with suppliers efficiencies – There are instances where suppliers can absorb some of the direct logistics costs through direct cost-saving mechanisms as well as their knowledge and expertise. It is essential to improve the collaboration between your company and your suppliers to benefit from the possible reduction in the cost of sales.
The warehouse objectives (KPIs) are designed to monitor and track warehouse efficiencies. The goal of these KPIs is to improve continuous operational improvements. As a result, these metrics enable management to take needed corrective measures to increase productivity and asset utilization.
- Improve warehouse receiving – The warehouse receiving KPI measures the process that receives stock or raw materials into the warehouse. Operations begin here, and if this process is inefficient, it will negatively impact all of the future warehouse functions.
- Improve warehouse putaway – The putaway KPI measures how long it takes for received goods to be packed away at each item’s designated location. Efficient putaway ensures a continuous picking process, substantially reducing lead time.
- Improve warehouse storage – The storage KPI measures the warehouse storage efficiencies. It does not matter whether your warehouse’s storage processes are manual or whether you use AS/RS (Automated Storage and Retrieval System). It is crucial to keep track of how effective storage processes are.
- Improve pick & pack – The pick & pack process directly impacts on lead time. Greater picking and packing translates into shorter lead times. The pick & pack KPI measures the pick & pack’s cycle time.
- Improve warehouse distribution – The warehouse distribution KPI measures and tracks the distribution process’s efficiencies or effectiveness in shipping or making goods available to end-users. The growth of the always-on supply chain model has added the function of distribution to the mix. The distribution capabilities must be tracked to ensure consistent product availability.
- Improve reverse logistics – Reverse logistics is defined as the return of unwanted, damaged, or incorrectly shipped goods to the warehouse. This KPI measures the efficiencies of the reverse logistics processes to ensure that they are as optimized as possible, reducing the time and costs involved, and providing customers with the highest-quality service.
- Improve inventory accuracy – The inventory accuracy KPI measures and tracks how accurate the warehouse’s inventory or stock is. This metric is fundamental to successful warehouse management. If your inventory tracking is inaccurate, your costs will skyrocket, and your customer satisfaction levels will drop drastically.
- Improve the efficiency of receiving – The efficiency of receiving KPI measures receiving efficiencies. Receiving stock is one of the warehouse’s most critical operations. Thus, this metric must be carefully monitored, and it should include aspects like received volume, customer returns, missing and broken stock, and return to vendor stock.
- Improve the picking and packing costs – The picking and packing costs KPI measures the cost of picking and packing products. Order picking is one of the most expensive and complicated processes; it is the most labor-intensive. This metric must be carefully monitored because it is directly tied to customer satisfaction and is crucial to income generation.
- Improve inventory turnover – The inventory turnover KPI measures and tracks how quickly your warehouse inventory turns over. High inventory turnover is good for your warehouse. Tracking this KPI provides visibility into your inventory rate because it will help measure buying practices and product demand.
- Reduce customer cycle order time – The customer cycle order time KPI measures the time it takes for an order to be fulfilled from the time the customer places the order to when it is shipped. This is a critical measure because it gauges customer satisfaction. Satisfied customers translate into repeat purchases and increased profitability.
- Warehouse shipping – The warehouse shipping KPI measures and tracks the total number of items shipped versus the projected number of items shipped. If the actual shipping metric is lower than the projected number of items shipped, the resultant shipping delays will indicate possible issues within the warehouse.
- Equipment – The value of optimally functioning warehouse equipment cannot be overstated. The equipment KPI tracks and measures the adherence to the maintenance schedules and uptime until the next scheduled maintenance.
- The big picture – The big picture KPI measures and tracks the inventory replenishment rates and the average number of late deliveries by vendors. By monitoring this metric, supply chain managers can successfully manage warewarehouse operations.
Distribution center or logistics management is a core function of all retail organizations. Real-time Key Performance Indicator (KPI) tracking and measurement provide the organization with the ability to measure the logistics department’s ability to perform its organizational functions and key expectancies successfully. Without this ability, the business runs the risk of losing customers because products will not be distributed timeously and effectively.
Logistics KPIs like the distribution center channel design and management, fleet management, shipping and packaging, quality control, rate of breakages and damage, logistics health and safety requirements, third-party distribution center management, and real-time order tracking capabilities and management.