Carving a successful footprint and managing to boost Peak season value involves the direct application of KPI supply chain best practices. These best practices go back to the root of digital transformation within logistics, recognizing when things go wrong and intervening immediately. Furthermore, the value of parcel efficiency grows in tandem with the demands of e-commerce. Therefore, the strategy for thriving through the upcoming peak season must evolve to become the most proactive, data-driven KPI supply chain in history. Of course, it helps to know which parcel metrics to track and boost productivity.
Final Mile Considerations Shippers Must Make to Develop a Sound Strategy
General, Average Transit Time
The first parcel KPIs supply chain executives and professionals need to understand is the generalized, average delivery, or transit time. This broad measure shows the overall level of transportation management optimization concerning small package freight. Additionally, it is a widely diverse metric that relies on the unique geographies and locations pouring into a global parcel network.
As further explained by Parcel Industry, “Day-to-day delivery is widespread in small geographies; great distances take 2-7 days while one-hour delivery is gradually becoming an offer in urban areas where the location of the warehouse allows this. Delivery time is a parameter that is increasingly focused on – and several carriers position themselves with new services particularly related to delivery time delivery in the evening, on the weekend, or the next day too (for example) the Middle East can mean the difference between getting the order or not. When using delivery as a competitive tool, it is important to measure your choice’s effectiveness: On-time delivery is an important KPI for all senders – especially when you have committed to the receiver to deliver within a certain time frame. KPI for on-time delivery must therefore naturally be as close to 100% as possible.”
Parcels Split by Transit Time by Carrier
Since knowing the average delivery time is only a fraction of the potential insights that a KPI supply chain offers, shippers need to understand how parcels stack up when split apart by the carrier. In other words, what is the average delivery time in transit time for each carrier? This provides an immediate level of insight into the performance and value supplied by partnering carriers and logistics service providers (LSPs). At the same time, shippers can gain additional insights by breaking the metric down by destination. That is where the real crux of supply chain efficiency lies, delving into data, and extrapolating insights into improving.
For example, considering Carrier A’s average transit time when delivering to Location A provides insights into that lane. However, data for Carrier A and Location E could be entirely different. The takeaway is simple; shippers and carriers need to work together to allocate resources better to bring the total transit time down in those markets where problems exist. Remember that customers expect a fast, free parcel shipping experience. They will accept nothing less.
Measuring and tracking the whole KPI supply chain also involves knowing the percentage of on-time deliveries. This percentage should be as close to 100% as possible. However, it is a generally good idea to track the rate of late deliveries. After all, an organization is more likely to act on data that indicates bad performance than data that shows a near-excellent performance.
Percent of Exceptions Occurring Over a Given Duration
Like all logistics, parcels are subject to problems. Packages may be lost, shipments get delayed, and other issues may arise. Whenever something goes awry, and an exception occurs. And tracking those exceptions, including their frequency, impact, and costs, can go a long way in deriving a maximum value throughout peak season and improving parcel strategy. Furthermore, shippers need to track the granularity of exceptions, meaning which carriers seem to have a higher rate of abnormalities. Of course, it is always a good idea to understand that the continuous advancement of automation in logistics is forcing more exceptions to go under the radar. Therefore, shippers that wish to embrace a KPI supply chain strategy should focus on the exceptions that require human intervention.
Tracking accessorials and other surcharges with parcel logistics form another critical metric. Peak season surcharges are expected. Accessorial costs are always going to be an issue in surviving peak season. However, the upcoming peak season will be subject to regular peak season accessorial surcharges and the pre-peak surcharges associated with the pandemic.
Online Portal Tracking Uptime
A final parcel KPI supply chain strategy should also monitor the total uptime of online tracking systems. While an argument exists that only customer-facing platforms should have top priority, it’s equally essential to track the business-to-business portal uptime. That is the only way to ensure the company is getting the full scope and parcel shipping view.
Derive More Value With a KPI Supply Chain That Focuses on Fact to Enable Informed Decision Making
As peak season approaches, the need to collect, analyze, and apply data will increase value. And shippers can build a successful KPI-driven supply chain that’s e-commerce optimized by tracking the top parcel metrics. Fortunately, those with that capacity within the TMS, such as the Cerasis Rater, will have a competitive advantage in parcel management.