What are the key performance indicators for managing global logistics operations?

2 Logistics costs

Another important KPI for global logistics operations is logistics costs, which measures the total expenses incurred by your logistics activities, such as transportation, warehousing, inventory, customs, and administration. Logistics costs affect your profitability and competitiveness, as well as your environmental and social impact. To calculate logistics costs, you need to collect and analyze data from various sources, such as invoices, contracts, reports, and systems, and allocate them to different cost categories and drivers. You can also benchmark your logistics costs against industry standards or best practices, and set targets and budgets to optimize your logistics spending.

3 Inventory accuracy

A third essential KPI for global logistics operations is inventory accuracy, which measures the degree of match between your physical inventory and your inventory records. Inventory accuracy reflects your ability to manage your inventory effectively and efficiently, as well as your data quality and integrity. To calculate inventory accuracy, you need to perform regular inventory counts and audits, and compare them with your inventory records in your system. You can also use inventory accuracy to calculate other related KPIs, such as inventory turnover, inventory carrying cost, and stock-outs.

4 Customer complaints

A fourth key KPI for global logistics operations is customer complaints, which measures the number and nature of complaints received from your customers regarding your logistics service or product quality. Customer complaints indicate your level of customer satisfaction and loyalty, as well as your reputation and brand image. To measure customer complaints, you need to have a system and process for recording, categorizing, resolving, and analyzing customer feedback, and use it to identify and correct the root causes of complaints. You can also use customer complaints to calculate other related KPIs, such as customer retention, customer lifetime value, and net promoter score.

5 Risk exposure

A fifth vital KPI for global logistics operations is risk exposure, which measures the potential impact of various risks and uncertainties on your logistics performance and objectives. Risk exposure reflects your ability to anticipate, prevent, mitigate, and recover from disruptions and crises that may affect your logistics operations, such as natural disasters, accidents, strikes, theft, cyberattacks, or regulatory changes. To measure risk exposure, you need to conduct a risk assessment and analysis, and assign a probability and severity score to each risk scenario. You can also use risk exposure to calculate other related KPIs, such as risk mitigation cost, risk recovery time, and risk resilience index.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?