The logistics of manufacturing and trading companies are changing ever faster. The complexity is increasing due to supply chains that are becoming more and more global and is only intensified by external effects such as the Corona pandemic or the shortage of skilled workers. Reason enough for us to shed some light on the subject:
How can logistics be managed more strategically? Which key figures are needed for this? And what are the biggest levers that can be moved in operational logistics, in site management and at management level?
Together with Prof. Dr. Franz Vallée from Vallée & Partner, we surveyed over 100 logistics decision-makers from the DACH region on precisely these topics and summarised our findings in the TradeLink KPI Report 2021.
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This article focuses on the key figures specifically for strategic logistics management, i.e. it is aimed at logistics managers and management. All key figures for the other areas mentioned can be found in our study, which you can download free of charge.
At the latest since the Corona pandemic, manufacturing and trading companies have once again understood their logistics as a central value driver. This opens up a number of factors through which operational management and the executive board can optimise their company's logistics.
We identified several factors in preliminary discussions, such as maximum delivery quality, total cost, cost efficiency, and even turnaround time of the goods in Sites .
Our study showed that achieving maximum delivery quality is the top priority for logistics decision-makers in the DACH region, at just under 44%.
Delivery quality is defined as the ratio of the number of deliveries complained about to the total deliveries. A complaint is made if the delivery does not arrive on time or completely at the ramp (see also DIFOT - delivered in full on time).
The result is particularly interesting because it shows that logistics managers see more value in optimising delivery quality than in reducing the costs of their processes.
In order to strategically control internal and external logistics processes, one needs access to current key figures in real time, which can only be guaranteed through structured data in cloud solutions. This is the only way to ensure that, for example, the delivery quality per delivery partner is calculated accurately and can be retrieved at any time.
Unfortunately, it is still common practice in logistics today that data is unstructured (e.g. Excel, email and written notes) and decentralised. This was also underlined by our study, because when asked whether the 100+ logistics decision-makers have the key figures relevant to their management available at all times, over 70% answered with a clear "no".
Only 7% were able to answer the question with a clear yes, which once again very clearly represents the current state of supply chain visibility. This is also in line with our experience from the market when we talk to companies about transparency in their supply chain.
Most companies still maintain the status of their incoming goods in paper form, often with manual notes directly on the delivery note. In order to determine key figures such as delivery quality on the basis of this, it often takes several employees several days of projects to digitise the data and assign it to the suppliers.
Excel spreadsheets are used to track deliveries, especially in contract logistics. As this data is at least digital, it still has to be manually reconciled with other data such as delivery bills (as PDF or in paper form) or orders (often in the ERP system). Again, this requires dedicated projects, which unfortunately excludes quick access to important key figures.
Time slot management-software often only maps the delivery and the necessary time and ramp, but not the other delivery quality criteria or other key figures that are important for strategic logistics management. As a result, Time slot management tools are also not ideal for creating important analyses and reports, as important data points are missing.
The only type of software that enables complete supply chain transparency and analysis at the touch of a button are supply chain collaboration tools such as TradeLink.
TradeLink makes it possible to assign all deliveries to an order from the moment they are announced and tracks all relevant data points directly in the platform. This enables analyses and reporting in real time at the push of a button, which enables optimal strategic control of site logistics.
In our study, we have highlighted many more key figures, such as key figures that are important for the management of operational site logistics. You are welcome to download the study free of charge.
