Logistics KPI Monitoring

Because inventory causes exponential pain with multiple warehouses... This infographics shows how to manage inventory in this context: ➡️ Centralize Inventory Visibility ↳ Issue: not knowing inventory levels across locations can lead to overstock in one warehouse and stockouts in another ↳ Action: Implement an inventory management system/ ERP that shows real-time inventory positions for all warehouses in one snapshot ➡️ Classify Products and Prioritize ↳ Why: Not all SKUs deserve the same treatment; some are high-value, others are seasonal ↳ Action: Use ABC analysis to rank products by focusing on A-items for tighter control ➡️ Define Replenishment Rules by Warehouse ↳ Why: Different warehouses cater to different regions or demand patterns. One-size-fits-all reorder points (ROP) won’t cut it ↳ Action: Tailor ROP, safety stock, and min-max levels by location. Consider lead times from central distribution centers or suppliers for each site ➡️ Breakdown Forecast by Warehouse ↳ Why: Each warehouse faces unique market dynamics ↳ Action: Generate warehouse-level forecasts, combining local sales trends with broader S&OP inputs ➡️ Plan Transfers Strategically ↳ Why: Sometimes it’s of lower cost or faster to transfer stock than reordering from suppliers ↳ Action: Set up a transfer framework; regularly review surplus vs. deficit at each location. Automate triggers for transfer orders when it’s cost-effective. ➡️ Monitor KPIs Proactively ↳ Why: Multi-warehouse complexity can hide inefficiencies when not tracking the right metrics ↳ Action: Track fill rate, inventory turnover, stock aging, and transfer costs at each site. ➡️ Plan Direct Dispatches & Save Costs ↳ Why: Dispatch directly from the plant to save logistics costs ↳ Action: Prepare daily dispatch plans targeting direct replenishment from the plant and use these warehouses for milk runs for distributors Any others to add?

Over the past few weeks, I've frequently been asked by the leaders I’m advising to share key performance indicators (KPIs) that organizations should consider as they embark on their supply chain digital transformation journeys. This has sparked important conversations about the necessity of aligning metrics with specific organizational goals and execution strategies. It also opened the door for candid conversations as to the need to engage staff in the process to allow for organizational enrollment which is crucial to long term success as it fosters a shared understanding of what success will look like and helps ensure that the selected metrics are tailored to your unique business context. Given the frequency of these requests, I thought it might be helpful to many to share a few common starting points for organizations to consider with the understanding that these must be tweaked for your own journey and this list is certainly not exhaustive… Digital Adoption Rate: Track the extent to which supply chain processes have been digitized, indicating progress in transformation. Order Fulfillment Rate: Track the percentage of customer orders fulfilled on time and in full. Inventory Turnover: Measure how frequently inventory is sold and replaced, highlighting efficiency in inventory management. Supply Chain Cycle Time: Assess the total time from order initiation to fulfillment, revealing areas for improvement. Perfect Order Rate: Evaluate the percentage of orders delivered on time, complete, and undamaged. Cost to Serve: Understand the total costs associated with fulfilling customer orders, including logistics and overhead. Forecast Accuracy: Monitor how closely your demand forecasts align with actual sales to enhance planning. Return on Supply Chain Investments (ROSI): Measure the financial returns from your investments in supply chain technologies and processes. Supplier Lead Time: Analyze the average time taken by suppliers to deliver goods, impacting your operations. Customer Satisfaction Score (CSAT): Gauge how satisfied customers are with product availability and order fulfillment. Curious to know what others think of this list as well…. #SupplyChain #DigitalTransformation #KPIs #Leadership #BusinessGrowth

🚛 Key Supply Chain Metrics I Keep an Eye On 📊 Working in logistics and freight forwarding, I’ve seen firsthand how important it is to track the right metrics to keep operations smooth and efficient. Here are some key ones that I always focus on: 🔹 Forecast Accuracy (MAPE) – Helps prevent stockouts and excess inventory. 🔹 On-Time In-Full (OTIF) – A strong indicator of logistics and supplier performance. 🔹 Inventory Turnover Ratio – A measure of how efficiently inventory is managed. 🔹 Days of Supply – Keeps the balance between overstocking and running out of stock. 🔹 Supplier Lead Time Variability – Unpredictability here can disrupt the whole supply chain. 🔹 Fill Rate – Ensuring customer demand is met without delays. I believe tracking these KPIs is crucial for any business that wants to optimize operations and reduce costs. Which of these do you focus on the most? Let’s discuss! ⬇️ #SupplyChain #Logistics #FreightForwarding #BusinessGrowth #Efficiency #Procurement #Shipping #KPI 🚢📦

Key Warehouse Management KPIs #Inventory KPIs #Inventory_Accuracy (IA): Measures how accurately recorded inventory levels match physical counts. Formula: (Accurate Inventory Count ÷ Total Items Count) × 100. High accuracy reduces stockouts and improves inventory management. #Inventory_Turnover (IT): Shows how efficiently inventory is sold and replaced within a period. Formula: (Cost of Goods Sold ÷ Average Inventory). High ratios indicate better inventory planning. #Shrinkage_Rate (SR): Measures the percentage of inventory lost to theft, damage, or errors. Formula: (Value of Lost Inventory ÷ Total Inventory Value) × 100. Lower shrinkage rates reflect better inventory control. #Stock_Out_Rate (SOR): Percentage of orders unfulfilled due to stock unavailability. Formula: (Number of Stock-Out Occurrences ÷ Total Orders) × 100. Lower rates indicate higher customer satisfaction. #Order_Management KPIs Order Cycle Time (OCT): Time taken from order placement to delivery. Formula: (Delivery Date - Order Date). Shorter cycle times improve processing and delivery efficiency. #Order_Fill_Rate (OFR): Percentage of customer orders fulfilled directly from stock. Formula: (Number of Fulfilled Orders ÷ Total Orders) × 100. High rates reflect well-managed inventory. #Order_Lead_Time (OLT): Measures the time from receipt of an order to its shipment. Formula: (Shipment Date - Order Date). Shorter lead times improve customer experience. #Order_Processing_Time (OPT): Time taken to prepare an order for shipment. Formula: (Completion Time - Order Start Time). Faster processing indicates efficiency. #Productivity KPIs #Warehouse_Capacity_Utilization (WCU): Percentage of warehouse space actively used. Formula: (Occupied Space ÷ Total Warehouse Space) × 100. Higher utilization reflects effective space use. Putaway Cycle Time: Measures time taken to move received stock to storage locations. Formula: (Time Goods Received - Time Goods Stored). Faster times reduce bottlenecks in inbound operations. #Warehouse_Labor_Productivity (WLP): Evaluates tasks completed per labor unit. Formula: (Orders Processed ÷ Labor Hours Worked). High productivity reflects workforce efficiency. #Dock_to_Stock_Time (DST): Time taken for products to move from receiving docks to availability for sale. Formula: (Time Products Available for Sale - Time Goods Received). Shorter times improve operational efficiency. #Cost & Profitability KPIs Cost per Order (CPO): Average cost incurred per order fulfilment. Formula: (Total Warehousing Costs ÷ Total Orders Processed). Lower costs indicate cost-efficient operations. #Storage_Cost_per_Unit (SCU): Cost of storing one unit of inventory. Formula: (Total Storage Costs ÷ Total Units Stored). Lower costs reflect efficient warehouse usage. #Inventory_Holding_Cost (IHC): Total cost of holding inventory over a period. Formula: (Annual Holding Cost ÷ Average Inventory Value) × 100. Lower costs indicate optimized inventory levels.

Top 10 Supply Chain KPIs You Need to Track: Supply chain success depends on measuring the right metrics. Here are the "top 10 KPIs" every supply chain professional should monitor, with their benefits, outcomes, and how to calculate them: 1️⃣ On-Time Delivery (OTD) - Measures: % of orders delivered on time. - Why it matters: Boosts customer satisfaction. - Formula: (On-Time Deliveries / Total Deliveries) x 100 2️⃣ Inventory Turnover Ratio - Measures: How often inventory is sold/replaced. - Why it matters: Reduces overstocking costs. - Formula: COGS / Average Inventory Value 3️⃣ Order Accuracy Rate - Measures: % of orders fulfilled without errors. - Why it matters: Cuts returns and improves satisfaction. - Formula: (Accurate Orders / Total Orders) x 100 4️⃣ Cash-to-Cash Cycle Time - Measures: Time to convert cash → inventory → cash. - Why it matters: Improves liquidity. - Formula: Inventory Days + Receivables Days - Payables Days 5️⃣ Perfect Order Rate - Measures: % of orders delivered on time, complete, and damage-free. - Why it matters: Reflects end-to-end efficiency. - Formula: (Perfect Orders / Total Orders) x 100 6️⃣ Fill Rate - Measures: % of customer demand met from stock. - Why it matters: Reduces lost sales. - Formula: (Units Shipped / Units Ordered) x 100 7️⃣ Days Sales of Inventory (DSI) - Measures: Average days to sell inventory. - Why it matters: Optimizes inventory levels. - Formula: (Average Inventory / COGS) x 365 8️⃣ Supplier On-Time Delivery - Measures: % of supplier deliveries made on time. - Why it matters: Ensures smooth operations. - Formula: (On-Time Supplier Deliveries / Total Supplier Deliveries) x 100 9️⃣ Cost of Goods Sold (COGS) - Measures: Direct costs of producing goods sold. - Why it matters: Helps pricing and profitability. - Formula: Opening Inventory + Purchases - Closing Inventory 🔟 Return Rate - Measures: % of products returned by customers. - Why it matters: Identifies quality issues. - Formula: (Returns / Units Sold) x 100 Why These KPIs Matter: ✅ Improve efficiency ✅ Enhance customer satisfaction ✅ Reduce costs ✅ Drive data-driven decisions By tracking these KPIs, you can transform your supply chain into a competitive advantage. #SupplyChain #KPIs #Logistics #Operations #DataDriven