What is MTS Logistics “KPI” for operations? I was recently asked this question at the first meeting I had with a CEO of a large apparel importer in NYC. I am glad I was prepared for it. Thanks to today’s social media tools I had already done my share of research with regards to the CEO’s professional background.
Apparently he was keen on finding out his service partners’ operational performance. With that said, I wanted to analyze this trendy subject that we hear of more and more.
In this article, I decided to take a deeper look in the parameter of ” key performance Indicators” in logistics. As we all know, logistics is about moving and tracking materials, supplies or information from one point to another. In this process, the most important factors are time, cost and customer satisfaction.
Based on their operational procedures, logistics companies may have different operational structures. There could be various methods to evaluate and measure performance. Here are some standard performance indicators that come to mind; time sensitivity, how long internal procedures take, speed of delivery and receiving time, cost and risk for different departments, how much is promise to customers and how much of it that we get done.
We tend to see that the focus on customer service has really increased throughout the years and now both customers and even prospects seek more detailed and more time sensitive and mutually beneficial business cooperation. Therefore, the expectations are even higher which obligates the service providers to actually find ways to add value to their services and products. We all know that starts with improving the quality of customer service, recruitment and training sales people properly. This is how we are able to measure and come up with our key performance indicators. I really think that what differentiates logistics companies is their customer service and not so much their price because customer service is all about communication with customers and engaging with them. So then what could be the KPI for customer service?
- The quality of service that customer service delivers
- The care demonstrated by customer service at normal situations and also emergencies
- The personable relationship they build with customers and even vendors
- The frequency of shipment status updates
- How long they take to revert back to customers
- How quick they make their decisions and how good the decisions turn out to be
This list may be much longer as all companies may develop different metrics and indicators for customer service. The most important aspect is to be able to measure the metrics. That is how KPI starts playing an important role.
When I was reading one of those articles about performance, I happen to read a really nice example, which I would like to share. This company in Atlanta, who wants to stand out with their execution, starts a post delivery audit program. The customer receives a phone call about 15 min after the driver gets a signature from the customer. It’s a short call just to ask a few questions and give customers the opportunity to give their feedback by leaving a voicemail. As soon as the system receives a low score, the marketing manager immediately takes action and calls back the unsatisfied customer. At the meeting the next morning, the low scores are discussed between the departments who delivered the goods and customer service. This way they come up with a metric that actually measures their performance of customer delivery experience.
KPI will help logistics companies to improve their customer service level continuously. In order to measure our performance, we always come up with our customer satisfaction surveys here at MTS Logistics Inc. We would like to make sure we think long term and strategically because the more we measure our performance the better service we could deliver as a team. At the end of the day, the most important thing is actually something we all agree here at MTS Logistics: “Perform well, Perform as a team, and Don’t let the phone ring twice!!” This has been our motto since day one and we will continue to keep up the good work!