Within logistics, it is important to select specific key measures that guide the effectiveness of the whole logistics operation. These KPI’s are then used to measure the performance of the logistics operation as well.
The following are considered to be typical KPI’s for a logistics function:
- On-time delivery to customer
- On-time delivery from suppliers
- Inventory value
- Inventory turnover
- Shipping costs
- Order accuracy
These KPI’s are linked to both the financial performance of the organisation and customer satisfaction. By regularly recording data and monitoring each of these areas, an organisation is able to identify which processes are performing well and which processes require improvement.