As a company, you want to see growth; no doubt about that. But if your processes aren’t designed to measure growth, your success may end up being a once-in-a-lifetime jackpot.
Measuring your company’s performance is crucial. It does not just help to realize the gains but also assists in tweaking processes if things are going south.
Since freight forwarders work with huge volumes of data, capturing and analyzing trends becomes vital. The volume, at the same time, can be overwhelming to organize data collection and analysis. But here’s where Key Performance Indicators (KPI) come into play. With freight management solutions, forwarders can quickly understand the company’s performance on various parameters. Also, simplified reports allow you to spot deviations and take action faster.
Why is it important to measure and monitor KPIs?
Running a successful business requires constant effort. For forwarders to survive in the long game, they must react, adapt and implement changes quickly. KPIs give you the tools to manage disruptions and accelerate growth. Freight KPIs are used by forwarders to track, visualize and efficiently optimize all relevant processes.
For instance, wouldn’t it help to know your highest revenue-generating customers and the routes they used the most?
Or How many orders have been missed to be completed on time?
KPIs provide the answers to:
- What’s working and what’s not
- When did a particular trend begin
- What are the factors leading to it
Now that we’ve established KPIs’ role and importance, let’s get down to picking the actual metrics that matter.
These KPIs help us keep visibility of the expenses incurred. Trends can help identify any scope to reduce costs.
- Transportation costs – Track an order’s price from beginning to end
- Pick & Pack costs – This covers the charges for picking the item from storage and packaging it for shipment
Billing and Invoice
Even a tiny error in the invoice can result in loss of delayed payments. Use these KPIs to keep your billing errors and receivables under check.
- Invoice Accuracy – Eliminate the root causes of inefficiencies to identify potential issues
- Freight payment accuracy – Accurate monitoring of accounts payable and receivables allows for healthy cash flow
These trends point out to areas of focus, either to making efforts to improve or correct. It can be important from a sales, operations, or management perspective in general.
- Number of shipments – Seasonal fluctuation trends help to optimize resources
- Equipment Utilization Rate – Another KPI for management and resource tracking Integrating KPIs with processes
Businesses use freight KPIs to identify stages in the flow of goods that need improvement. To make constant improvements to your business, processes are essential bridges that plug the gaps. KPIs become essential elements that highlight the potential for improvement. When worked well together, KPIs and processes can act as a framework for growth-focussed companies.
The best freight management software extracts maximum benefits from the data collected. KPIs integrated into the software solution support report generation that presents actionable insights. Based on your company’s goals and objectives, integrate the KPIs into your processes using the apt freight software. To stay competitive, monitor relevant KPIs to position yourself for continual success.