Logistics KPIs, or Key Performance Indicators, continue to be a popular and significant topic.

In this video, we’ll talk about some of the common mistakes that people often make when dealing with logistics KPIs.

I will also help you simplify your outlook towards KPIs.

So, make sure to watch the whole video and see if you don’t make these mistakes.

 

Here’s the link to Audit your Warehouse: Boost Your Warehouse Performance

Related articles on this topic have appeared throughout our website, check them out:

Logistics KPIs.

That’s the topic for this week, and I thought it’s probably a good topic to have early on in a new year coming right up.

So one of the most popular topics on this channel is KPIs. People get really hung up about KPIs. And the thing that they get hung up the most about is the specific KPI. What should I measure in my warehouse? What should I measure in my transport operation? What should I measure in my inventory management?

What I’d like to talk about this week is not the specific KPIs, although if you hang on till the end, I’m going to give you some great links, which will show you specific KPIs. What I want to talk about this week is some of the common mistakes that people make, and I want to try and help you simplify your whole outlook towards KPIs.

So one of the things that I find people do fall into the trap of is having too many KPIs. And I always reckon you should have three or four KPIs per level in the organization. So what do I mean by that? Well, if you’re managing warehouse, you probably want three or four key performance indicators. If you are managing, if it’s a large warehouse and you are managing a particular function within the warehouse, you probably want three or four around that. Step back a bit. If you’re the distribution manager, you probably want three or four that encompass the warehousing, the transport, and so on.

Where I see KPIs kind of going off the rails a little bit is the more senior people in the organization are not getting appropriate level KPIs supplied to them. So the MD, the CEO, doesn’t necessarily want to have a look at the case picking rates and so on in the warehouse. What they’re looking for is warehouse costs as percentage of sales, transport costs per drop, these sort of things, much higher level KPIs. So I think that’s probably one of the biggest tips I could give you, is tailor the KPI to the level of management in the organization and don’t have too many.

The other thing that a lot of people, and it’s kind of linked to this, a lot of people just don’t measure the right stuff. You remember that old saying, “What gets measured gets managed.” It is so true. And you need to look at the outcomes that you’re looking for in the warehouse. So I’m talking about a warehouse specifically in this example, but if you want increased productivity in the warehouse, then maybe measure things like picking rates and write down to case picking rates, layer picking rates, pallet picking rates and so on. Maybe have a look at things like cost per order dispatched from the warehouse, that kind of stuff. So measure precisely the things that you want to influence.

It’s a little bit like if you look at the 6 KPIs or 10 KPIs that you are managing now, and maybe your goal is to improve productivity in your warehouse. Ask yourself, measuring these things, will it get me closer to measuring that goal? But more importantly, by measuring these particular things, will it drive the right behaviours to get towards that goal?

So that’s kind of the third point that I want to make on it. Be very aware that whatever you measure will drive behaviours in your organization, and that’s how you should use KPIs. But sometimes people measure the wrong stuff.

There’s an example from many years ago that I will never forget, it’s indelible in my brain, where in a very large organization, this multi-billion dollar company, they were measuring the number of cartons processed through the distribution centers because they spent a lot of money on these new distribution centers and they wanted to have a look at the cost per case throughput. So obviously the more cartons going through the distribution center, the lower the cost per case, cost per carton.

It drove inappropriate behaviours because products that would be far better bypassing the warehouse and being delivered direct were being sent through the warehouse to raise the number of cartons being processed through the warehouse.

Sometimes KPIs a little bit double-edged. So particularly if you’re a senior person in an organization, have a look at what you’re measuring and kind of say to yourself, what behaviours could that drive? Are those the behaviours that I really want? So remember, look at the number of KPIs, the levels of KPIs and the level of KPI for the management and the organization, and also make sure that you’re driving the right behaviours.

So I didn’t want to get into specific KPIs. I’m going to share a whole bunch of links with you. So do have a look in the description below the video. So what am I going to put in there? I’m going to share a link to the best logistics KPI I have ever come across. And there’s a whole article on it. There’s a video on it. So do go and have a look at that. I’m sure you’ll be impressed with it. I’d love to hear your comments down below.

I’ll share a link to the playlist on this channel all about KPIs. We’ve got loads of videos on KPIs. I think what happens though is people forget that there’s hundreds of videos on this channel. I forget how many hundreds, probably 500. So most of the topics that you’re interested in have been covered. So I’ll share that link to a playlist all about KPIs.

And I’ll also share a link to our blog at Logistics Bureau. I’ll share a category link which has got articles all about KPIs. So there is no excuse to say I can’t find enough information about KPIs.

So have a look at those links. Do comment down below. I love to hear your comments. What’s the best KPI you’ve ever come across? What mistakes have you seen with KPIs? If you’ve got questions about KPIs, do mention that as well. And let’s see what topics we have coming up for the rest of the year.

One thing I’m going to mention, I don’t normally do this on this channel, but I’m going to give you a heads-up for something that we’re promoting to our clients in Logistics Bureau. If you’re running a warehouse and you want to have a quick audit of your warehouse, so really have look at the performance and look at the sort of things that you could improve for 2024, I’ll put a link to that down below as well because in the next few days, I think Logistics Bureau is putting out a special offer to have your warehouse audited. So I’ll add that into the link as well for those who could be interested.

Thanks for watching. Love to see your comments and questions down below, and I’ll see you next time. Bye for now.

 

 

Contact Rob O'Byrne
Best Regards,
Rob O’Byrne
Email: [email protected]
Phone: +61 417 417 307
Share This