Key logistics figures are indicators

To get a regular and up-to-date overview of the cost situation in their logistics, the logistician works with specific logistics indicators. With the help of these indicators, it is possible to quickly and accurately identify areas in which the company currently needs to take action. This makes it possible to take targeted control measures. Although logistics is the focus here, it is not only logistics costs that should be considered. There are a number of other important key figures that provide relevant information about the economic situation of logistics.

Logistics indicators: Key Performance Indicators

Key Performance Indicators (KPIs) help you achieve your business goals. Those who record the right indicators and draw the right conclusions from their history and development will be able to reduce costs while increasing the quality and efficiency of their services. However, there are a number of things to consider when putting a logistics KPI system into practice.

Typical questions about logistics indicators:

In order to develop a meaningful system of indicators, you first need to formulate a vision: What are the critical success factors for my business? The first step is to identify where the critical success factors are at the process level. You can then use these as the basis for the corresponding performance indicators to monitor strategic progress. However, an indicator system that is too complex is not always effective. It is therefore important to ask critical questions: How many KPIs do you really need, and is less not more?
When defining individual KPIs, you should also consider where the realistic target ranges lie for each KPI. For external comparison, it is also important to determine which KPIs are meaningful for benchmarking with comparable companies and industries.

Range of KPIs

So how do we proceed? First, we work together to define the business objectives and strategies. Then we determine the actual performance and cost structure, preferably at the individual process levels. We then derive the critical success factors.
For each process level, the project team selects the KPIs to be used. Workshops with process owners are a proven method. The KPIs are then linked across process levels and consolidated at management level. By setting short, medium and long term targets for each KPI, you have a planning and monitoring tool against which you can compare actual values. By continuously measuring and comparing the actual values with the target values, action points can be derived and optimisation potential can be identified.

Logistics Indicators for Managers

Managers and their employees sometimes lose sight of what really matters amidst all the goals and demands. They need a few simple logistics indicators that tell them whether they are doing a good job or not. These are called Key Performance Indicators (KPIs). KPIs are an important tool for strategic logistics management.
With Orgaplan, you get the support of an experienced logistics consultant. We make sure that the KPIs are carefully selected and accepted by the employees in relation to the business strategy. Unfortunately, today we often collect a large number of logistics indicators without really understanding their meaning and significance.

KPIs allow us to control, monitor, coordinate and optimise processes. They create transparency and highlight the need for action. However, due to the overwhelming number of possible performance indicators, there is uncertainty about which ones to select for strategic progress control. There is no general answer to this question, as the differences between industries, companies and processes are too great.

The following key points should always be considered when selecting KPIs:

• Relevance: What is really important in terms of achieving goals?
• Individual composition: Individual selection of KPIs, e.g. by region, process level, functional area, etc.
• Manageable number: Not too many KPIs should be collected, otherwise the overview is lost.
• Simplicity and traceability: Simple and clear definition of the KPIs. All parties must be able to understand what is being measured, why and how.
• Influenceability:The collected KPIs must be influenced by the responsible employees.
• Quantifiability: Selected KPIs must be measurable as numbers. This also allows for comparison over time.
• Reproducibility: KPIs must be reproducible under the same conditions.
• Time levels: KPIs should cover past, present, and future time frames.
• Data collection effort:: KPIs should be collected as frequently as possible and with minimal effort.