Logistics involves the process of acquiring and bringing in goods, services, and information, covering purchasing, warehousing, fulfillment, transportation, and delivery. It involves managing resources like people, raw materials, products, and equipment to ensure the smooth running of operations. To streamline logistics, it's important to measure the different stages involved in this business function. Measuring KPIs tied to order management, supply, inventory, distribution, and transport management can help identify areas for improvement in performance. To learn more about logistics, check out this logistics primer.

Stages to Measure

Breaking down the logistics process into stages can be beneficial in optimizing operations. By measuring key performance indicators (KPIs) related to order management, supply, inventory, distribution, and transport management, you can identify areas for improvement.

What Is Logistics Management?

Logistics management controls the procurement, movement and storage of goods. The process starts at the product's origin and ends with the consumer. Logistic management also includes order fulfillment and integrates with other business functions.

Why Are Logistics KPIs and Metrics Important?

Logistics KPIs enable businesses to compare their performance to industry benchmarks, providing valuable data to enhance their operations. This data helps identify mistakes and ways to address them, leading to cost reductions. For instance, on-time shipping is a useful KPI for warehouses, indicating the percentage of shipments that left on time.

Since timely shipments are crucial and delays can harm customer satisfaction and cost businesses money, a below-benchmark on-time shipping rate indicates warehouse issues. Thus, measuring on-time shipping is an important factor in determining customer satisfaction.

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