It is a fact universally acknowledged that the modern world of business is expanding manifold. With the increasing upheaval in the socio-political milieu as well as with the focus getting shifted on customer satisfaction, all the stakeholders in a business are trying to stay afloat, relevant and cater to the complex needs of the customers through multiple gateways. If anybody is to be asked what end goal is for a business, the most obvious answer to it would be to rake in profit and to raise the margin. Fair enough, but with business enterprises getting multifarious with each passing year, it is very important to zero in on the foibles, work upon them, set up the objectives of business and compare the tasks to identify how far the targets have been met. Hence, comes the business term called KPI or Key performance Indicator. In the modern financial scenario, having fixed KPIs is imperative for a business to succeed and if the venture is as diverse, as dynamic as a supply chain firm, then having multiple KPIs and resorting to technology is more of a need than the luxury to be afforded by the big players.
Transportation management is the bedrock for any supply chain management organisation because it constitutes of a major chunk of the expenses that are pumped in. Efficient dealing of the transportation can yield handsome revenue for the businesses. Many a times it has been observed that the planning of such an important and challenging stage of supply chain is often done manually or through linear spreadsheets. One has to understand that the domain of logistics has become so much complicated and data-driven that even the best of the planners in the game fall short of meeting the demands. Hence a proper solution system, savvy with technology that can measure the KPIs has passed in to become the need of the hour.
Now, the question that inadvertently rises is what the business metrics that are to be measured are. It must be admitted that different organisations have different metrics and they all follow divergent KPIs. But it has been mentioned earlier that the objective of any business boils down to cost control and resources optimisation. It is only the different trajectories that are taken to ensure that the goals are fulfilled. Some of the metrics that need to be controlled and measured range from the workings of the grass-root level employees to the top executives and the plan and the vision of the companies. If we have to write about some of the KPIs that are roughly expected to be operational on a company’s KPI dashboard are, as follow:
- · Drivers are the backbones of any transport management firm. If their behaviour is monitored, checked, rewarded, then a lot of inefficiency can be weeded out and a lot of cost can be channelized into savings. Companies can integrate the highly intelligent routing software in the vehicle’s ELD system to track and observe. In this way, not only can the accidents, over-speeding, traffic violations, excessive loading (all which can cost excessive expenditure) be averted, but also the industry policies of hours of operation, flouting of it et cetera can be checked and corrective measures to ensure compliance can be undertaken. This KPI of observing the drivers’ behaviour can save extra miles and thus extra money. A relevant and reliable data sourcing not only opens the floodgate of profit through resource and data optimisation, but also puts your workers in a healthy competitive environment, wherein they put their best foot forward to earn rewards.
- · With the advanced KPIs like measurement of cost, measurement and company assets, one is bound to make a comparison between the plan and the execution and hence work upon the improvement of the sectors lagging behind or focus on the convoluted, intertwined sectors to maximise customer satisfaction trough better on time and in full deliveries and thereby turning it into profit and good will. With the help of such KPI, a company can keep a stock of its unused assets, its vehicles, their performances to cut down on the operational cost and empty miles. Moreover, through the adequate calculation of cost and revenue per mile, per stop, the companies inch higher towards their aim of cost control through fleet and route optimisation.
- · All these data that are curetted can be used to gauge the market and industry standards by comparing with the trends that are prevalent in the other companies to identify the loopholes, curtail incompetency and turn cost into turnover.
Probably the biggest hurdle that comes between the implementation of the KPI analyses is time and money. The small and mid-level shippers are wary of the money that needs to be invested in software, to automate the system and to bridge the gaps between the systems. With regard to time, it is a general observation that distributors and shippers who are involved in the final-mile delivery are embroiled into so much of planning that they fail to emphasise on the actual shortcomings of the businesses. As a means of redressal, it can be safely said that with solutions as effective as the sophisticated ones, with in-built route-optimisation planning and KPI indicators, they are bound to add value and worth to the company in the longer run by organising and streamlining the chaos that the companies find themselves more often than not and consequently, points out latent drawbacks, suggests ways of profitability and becomes a good investment, promising plump ROI.
To start is to start by taking baby steps. A company needs to set its goals straight and define a proper yardstick and baseline for its goals, prioritise and start working upon specific order or KPI-centric issues that seem to be the priority. The dictum of ‘Don’t bite off more than you can chew’ fits perfectly in this context. By collecting all the data, putting it in perspective of the industry norms, comparing the planned and the actual action, companies can actually estimate how much of cost is being taken up by transportation charges and how they appear to have become a key player in determining cost and revenue. The ancillary expenditures related to the safety protocols can be checked and measured and also the growing concerns regarding the carbon footprints of the organisations can be put in check and progress in this regard can be attempted and attained.