With the increasingly complex supply chains that organizations must deal with and often manage, it has also become increasingly important to be able to measure transportation efficiency accurately. Supply chains, of course, refer to the path from initial supplier to the final consumer, and are often quite involved, being composed of many different firms and agencies. Raw materials are gathered and processed; products are manufactured at factories, transported to warehouses and retail outlets, and delivered to end consumers. Each part of the chain depends to an extent not only on those parts immediately before and after them, but on all the other parts of the chain. In many cases, a catastrophic failure at any part of the chain would have repercussions on all levels, which might eventually lead to a larger failure of the supply network itself.

Since transportation plays such a huge role in these systems, it would only make sense to be interested in maximizing the efficiency in transportation processes. But, again, even restricting attention to transportation alone, there are still a large number of factors that should be considered. And often, it is not even possible to narrow the field down to just a couple of factors because of how many of these factors are interrelated, much like the steps in the bigger supply chain. Optimizing according to just one of these metrics might seem to be a good idea, but without the proper analysis and synthesis with other factors, it could very well just lead to lesser efficiency overall.

For example, one factor that is obviously quite important is transit time. This refers to how long a shipment is in transit, or, that is, how long it takes to arrive at its destination from the time it leaves its source. Transit time would depend on many things, such as the transportation channel or channels to be used, local geographic conditions, along with specific considerations, such as fragile cargo and other circumstances. In general, average times are provided by the shippers themselves, and transit times are measured against these estimates obtained through experience. Optimizing transit time while ignoring all other factors is obviously a bad idea. Because although it might lead to greater efficiency in terms of turnover through time, it would also most probably lead to greater costs and greater risk of damage and loss.

Managing transportation should always start by ensuring that there exists a system to measure transportation efficiency. This may seem like common sense but it bears repeating. Management aims to improve the performance of a process or organization and this improvement will only be tangible if accurate comparisons can be made. These comparisons should be based on the relevant metrics or measurements, of which transit time is just one among many. By keeping a broad base of transportation metrics and maintaining an up to date, accurate tracking system for measuring and recording these, management will be much better able to make optimal decisions. And a smoothly working, efficient transportation system will go a long way towards making supply chains and networks that much more cost-effective.

Product development and production are just the tip of the iceberg. This does not mean that these processes are not important for they obviously are. However, the flow does not end with just product development and production. No matter how great your products are, they still would not reach the consuming public without the implementation of efficient delivery system. And to ensure such an efficient delivery system, then no company should be without delivery metrics. This is because delivery metrics are very much needed to examine, control, and improve the delivery procedures of a certain company.

But what are delivery metrics? In its most basic form, this is actually a system that is comprised of indicators that are specially designed to measure and control the delivery system of a company. These metrics or quantifiable aspects are needed when it comes to measuring the performance of a certain company, especially when you put into consideration manufacturing, distribution, and delivery. The ultimate goal of customer satisfaction just would not be achieved without the helping hand of delivery metrics.

Delivery metrics cannot be discussed without the need to mention KPIs or key performance indicators. KPIs are actually the quantifiable aspects mentioned above. These quantifiable aspects are used to indicate how the company is performing at present, and this is then pitted against the goals and objectives that have been set in the company’s very foundation. In choosing which particular KPIs to include as delivery metrics, you have to remember that less is actually more here. If you include one too many KPIs, it would become all the more confusing for you to analyze your data at hand, let alone interpret it.

Commonly used delivery metrics include on-time pick-ups, transit time, claims percentage for freight costs, inventory months of supply, on-time line accounts, and customer order promised cycle time. Of course, you cannot really expect to have all companies use the same set of delivery metrics, as mentioned above. You cannot even expect two companies that belong to the same industry to practice the same delivery metrics all throughout. You have to understand that no two companies would have the same corporate goals and objectives that they want to achieve. Thus, delivery metrics would be quite relative here as well. Aside from corporate goals and objective, businesses would have their own sets of needs to fulfill as well. These needs would also play a role in determining which delivery metrics to include.

The great thing about implementing delivery metrics is that managing on-time delivery of your products and services would be made easier. Moreover, the indicators can be used to show you how your company is performing in terms of the different aspects in your delivery system. Should there be any need for improvement in any area, your delivery metrics can be used to point out such areas and more. Data collected can also be used to determine proper course of action.

Do not worry if you are not all that sure about the delivery metrics to use for your company. You can browse the web for sources that can help you out here. Just remember to choose the metrics that are relevant to your own company’s needs.

No matter what product or service your business offers, one of your primary goals is undoubtedly customer satisfaction. Let us say, for instance, that your products and services have become one of the most coveted in the industry. Your company has become one of the largest names as well. But all of these would not matter if your company fails to deliver the products and services to the clients on time. There is no room for customer satisfaction in that at all. Thus, it is of equal import to measure delivery efficiency with KPI or key performance indicators. This way, you can make sure your delivery system is indeed efficient so that you can provide quality service to your customers who surely deserve the best from you.

Just what exactly are delivery metrics and the KPIs that come with them? These are the quantifiable aspects that measure the performance of a company when it comes to its operations. This is not easy to do at all because there are so many factors to consider here. What’s more, there are factors that are not in quantifiable form. How can you then measure these non-quantifiable factors? This is made easier with key performance indicators because the factors are broken down so that analysis and processing can become simpler. Also, if there is one thing you should know about delivery KPIs, it is the fact that they can differ from one company to another. It does not matter if the companies at hand are of the same industry, or are producing the same goods and services. You have to remember, companies have their own set of goals and objectives that they want to achieve. These can very much vary throughout the different companies in the industry. Thus, you cannot expect for two companies to use exactly the same delivery metrics.

In spite of this fact, there are still a number of delivery metrics that are commonly used by a lot of companies. These include on-time pickups, inventory months of supply, transit time, defects per million opportunities, customer order promised cycle time, on-time line accounts, and claims percentage for freight costs. These are just some of the commonly used KPIs in measuring delivery efficiency. If you have yet to develop a balanced scorecard for measuring the efficiency of your delivery system, you might want to consider implementing some of these commonly used KPIs. Also, it is actually recommended to use as few KPIs as possible. Less is actually more in this scenario. If you use a lot of KPIs for your system, you might end up entertaining extraneous variables that can influence accuracy of the measurement process. Limit your system to using just 5 KPIs, so be sure to choose the KPIs that are relevant to your delivery system.

With the implementation of such a system, it would then be easier for your company to measure delivery efficiency with KPI. What’s more, the management of on-time delivery of products and services is made easier as well. This can then help your company in achieving one of your primary goals, which is undoubtedly customer satisfaction.