KPIs are indicators that help companies succeed and make better decisions, so what KPIs should a Logistics Company implement?
According to the website Qlik.com, “KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific objective. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions. From finance and HR to marketing and sales, key performance indicators help every area of the business move forward at the strategic level.” These measurements are vital for any business because they help you to keep your goals in mind and your team aligned to reach them. In logistics and supply chain companies, there are some important KPIs that help you achieve success in the industry. Keep reading to know what works best for your company.
We spoke with experts in our company, and this is what they had to say:
According to Geronimo Rodriguez, Growth Master at Hubtek, when talking about KPIs for logistics companies (especially on the operations side), fundamentally, it’s important to have a way to measure profit; how much money a person is contributing to your company. However, for Geronimo, what is even more important than that is having a way to measure the quality of the work that they’re doing. So, identifying how much a person is contributing to your company in the long game. For example, a Carrier Sales Rep could be booking a lot of loads and having amazing profit, but then, how many of those loads actually go through? How efficient are they? “I would rather have a Carrier Sales Rep who has better relationships with my carriers than another one that maybe sells a little bit more.”
He believes that it’s the same for other roles that are traditionally a little bit more difficult to measure. For example, track and trace. You could measure the contacts. How many people are calling. But then, how do you measure the quality of work? What you could do, for example, is measure how many carriers actually reply to their contacts, and how engaged they feel. So, there are a lot of ways to implement these metrics. You could have it built in where you know what loads are not going through, but you can also see, for the Track and Trace Reps, how satisfied the carriers are with their service. So, I think, in general, you can have traditional sense performance, but it’s even more important to have some sort of quality-based and measured performance.
Katherin Camargo, our Marketing Director, argues that not measuring KPIs, or measuring them poorly, is like moving blindfolded. You might know what your goals are, but if you do not measure whether or not your efforts are generating any positive results, it is the same as not knowing if you are going in the right direction or not. Plus, having clear KPIs will allow you to make adjustments if needed, and guide your team better. She gave us 4 steps for establishing goals and KPIs:
- Assess your current state and desired state (your goals). Making sure you know your current strengths and weaknesses is key to accomplishing those goals. She recommends starting with Hubtek’s overall business assessment service, to have a comprehensive understanding of your current state.
- Do not try to approach those goals as one big, unclear project. Once you have the results of your assessment, define how to fulfill that goal by dividing it into smaller KPIs, with clear deadlines. Having a coach helping you and your team with define those goals and KPIs can be helpful too. If you contact our team, we can assist you with that.
- Distribute the fulfilling of those KPIs among your departments or team members. Here is where communication among your team will be key. Get their feedback to create KPIs according to what they can do best.
- Schedule a KPIs revision time to keep track of the progress and identify factors that may become issues. To avoid existing issues being hidden, this should be a meeting oriented at problem-solving, not a blame-game meeting. A positive environment where they can get support if they need it is key.
She concludes by saying, “I am a big fan of KPIs and the measurement of progress. The effectiveness and speed of the accomplishment of goals are beyond description when you coordinate efforts internally.”
Finally, Mariana Valencia, Sales Director at Hubtek, thinks that KPIs are crucial for any position because it is true what they say: “What you cannot measure, you cannot control.” She states that, as a sales leader, she believes KPIs are even more critical, because they ensure that leaders have a clear view of where the business is headed; and choosing the right KPIs is very important. She states that you should not only measure results, but you must also measure activity and performance. In that way, you’re going to have a motivated team that knows that you’re looking at what they are doing. The type of KPIs that you implement for your company and your sales team can be very different based on the type of company that you have, or that you’re working for, and the type of commodity that you’re selling. However, there are some basic KPIs in sales that you can implement. In terms of results, you can measure the sales per each Rep, the product performance, the average conversion, the expansion of new and existing accounts. On the performance and activity side, you can measure the volume of calls, the number of demos that they Rep conducts, the number of open sales opportunities. She concludes by saying that the KPIs will depend on your type of company but having a good set of KPIs will help you to be very successful.
Based on our expert’s points of view, let us know what you think.
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