How can you use logistics performance measurement to gain a competitive edge?

To do this, you need to correctly determine the effective parameters in the logistics industry, for example Costs Delivery time Valid business partners Diversity in service delivery No cancellation of orders Safe delivery of goods

In order to effectively measure logistics performance, we must have clear details and a well-defined plan. With a solid plan in place, we can save millions of dollars and ensure timely production of our products.

You can measure various logistics KPIs such as on-time delivery, order accuracy, inventory turnover, etc and identify areas where your logistics operations are not performing optimally. This insight allows you to focus on improving those areas to enhance overall efficiency.Monitoring logistics performance metrics enables you to identify cost-saving opportunities. For example, if you notice high transportation costs due to inefficient routing, you can optimize routes to reduce fuel consumption and transportation expenses.You should consistently meet or exceed customer expectations in these areas.By doing so you can build customer loyalty and gain a competitive advantage.

Performance measurement needs to be an integral enterprise process that aligns and enables the organization strategy at every process in the Supply Chain are we measuring (Plan, Source, Make, Deliver, Return, Enable) . For example, customer-centricity would focus in fill-rates, on-time delivery, on-time in full, quality and sustainability. Another example would be a manufacturing environment with Just-in-time deliveries, Kanban, Inventory levels, Reliability, and so on. The SCOR Model with Apics is a reconized reference to determine Logistics Performance Measurements.

This is important for gaining the confidence of our stakeholders. Without this measurement, we lack vision and control, which can lead to disorder. Implementing logistics performance measurement promotes discipline and enhances decision-making and planning.

Fundamentally, you often have a few basic reasons to measure Logistics Performance. First, you need to understand and have visibility of how is your organization performing and where you are ranked when compared to other players in your industry (or similar). Second, you want to set achievable (and aggressive) performance improvements, it is essential to have a high-performing and curious culture that strives to be better and improve itself. Another reason is to be competitive in your industry and to your customers. Last, performance measurements should drive a culture of logistics excellence and continuous improvement.

In my point of view, Logistics is crucial in international trade as it significantly impacts the efficiency and reliability of export and import processes. A well-managed logistics chain not only ensures timely delivery but also enhances trustworthiness between the buyer and seller. When logistics operations run smoothly, it reflects positively on your company's reliability and professionalism, which are vital for building trust with buyers and partners. By focusing on these aspects of logistics your company can differentiate itself in the competitive export and import market by offering reliable, efficient, and transparent logistics services that build trust and satisfaction among buyers and partners alike.

These indicators are important for identifying future issues and areas for improvement. With these metrics, we can quickly identify problems, optimize freight costs, and improve inventory planning.

There are many ways to collect import and export performance data. If we have a systematic ERP system, we can obtain the necessary details for analysis from there. If we do not have such a system, we can use third-party software like TMS or rely on traditional methods to track data manually. In this era, leveraging AI to develop systems for tracking and analyzing logistics performance is crucial. AI has the ability to learn independently, allowing us to control and improve these systems using our ideas.

Before the collection and analysis we should identify the data necessary to measure performance and the data source. Either is transactional data via IT systems (ERP, DRP, WMS, TMS, WCS, MES, FBAP, ITC and others), survey data such as Net Promoter Score, which is a common metric used in customer experience programs, or internal indicator of reliability. A fundamental topic is the quality of the data and the window of analysis. In my career, I've encountered multiple experiences where KPIs and metrics have been defined but when is time to get the data to build the metric either it does not exist or it is unusable. A data strategy and process for data sustainability is essential to support performance measurements.

For complex reports, we can present internally to identify issues and find improvements. For external statements, the best method is using dashboards. These dashboards present data in a simple and effective way. Currently, I use Smartsheet and Power BI to show my logistics performance data to stakeholders.

Consider your team members and the culture of your team and overall organization. It is very important to foster a culture of performance in alignment with the company values and as leaders we should tell the story and connect the dots that metrics are depicting. Find ways to bring performance results to process improvements and recognition of team members, make it simple and circular. The goal is that every member on the Logistics team can speak to the indicators and the actions driven by them.