We must define what are the challenges in measuring metrics in logistics to measure growth and areas for improvement.
Every company must define the challenges in measuring metrics in logistics to measure how the business is growing. This practice allows you to see different aspects of your company and helps identify the areas you need to improve. According to a LinkedIn blog published by Entrepreneurship, “Success metrics are crucial for any business, as they help you track your progress, evaluate your performance, and make informed decisions.”
We spoke with experts in our company, and this is what they had to say:
Drew Cherba, Hubtek’s Vice President of Client Development, states that every logistics company tracks the “Big 3” metrics – volume, revenue & gross margin. “These are metrics that are fairly simple to track because we see this information on every load tendered, delivered, and closed every day. Every organization has its own way of setting goals for “the Big 3”, and methods to achieve them. It’s difficult to move the needle on loads, revenue, and margin on a daily and even on a weekly basis, so we have to simultaneously strive to achieve several other initiatives in an effort to grow our volumes and dollars.”
“It can be easy to set initiatives for the organization and naively assume that our teams are buying in and want to follow through on those initiatives that leadership believes will drive the bottom line.
It is challenging to actually measure and track those initiatives to see if they are effective in achieving the company’s goals. Maybe they’re hard to track. Maybe we forget to determine how to track them.”
Drew shared a few keys to accurately measuring and tracking your team:
- Choose initiatives with metrics that can be easily tracked. Don’t over-complicate it!
- Create a cadence of accountability for the team so the tracking is timely and accurate. Meet often and regularly to address the metrics and successes and failures of the team to hit those marks.
- Create a scoreboard that every team member can see and understand. We can’t keep score and track our progress without a scoreboard.
- Try the same initiatives for a set amount of time to determine if they’re the right ones to track. Revisit, in one of your regular accountability sessions, to determine if there are other best-fit metrics that might help you achieve your goals faster.
“Determining which smaller everyday goals to strive for in order to achieve our ‘Big 3’ goals may take some work, some trial and error. Once you do figure out which of those initiatives are driving your business forward, then you can implement it into your daily practice, and you’ll already have a method to track your progress.”
Joel McGinley, Hubtek’s Managing Director, affirms that there are three main things you really want to look for when you are measuring and establishing metrics for your company:
- How, and what kind of data you are going to collect?
- How you are going to make sense of that data to turn it into useful information, so the reporting aspect.
- The display – how are you going to make that data known to people so that it’s meaningful to them?
“If we look at the first one, the data that you should be collecting falls into two categories, the results-based data and the activity-based data. An example of results-based data is, how many loads did you move this week? How much revenue came off those loads and how much margin was generated off those loads? Collecting the data is really centered around what the capabilities of your TMS are. If your TMS can’t provide the data reporting, you’re going to have to utilize third-party software, something like Tableau or Power BI, in order to extract that data out of the TMS database. Then, the third is, how do you make it meaningful in a way that the company is going to be able to use it? So, that’s typically around creating the dashboard, the quick look, the “at a glance” type of information that’s going to be meaningful to the people that are involved in producing that data.”
“When you’ve established those three things, you can begin to really use metrics in a way that propels your company forward. You can begin to trend those things and track them, and you can begin to set targets and goals and measure your KPIs, your key performance indicators, against the metrics that you’ve established. We have found that anytime a company implements measuring and metric management, its company performance improves. You can improve what you can measure. So, establishing a good data collection and data conversion to information program within your company, that alone can propel your company forward.”
He concluded by saying that It’s very powerful when an organization commits to establishing metrics, measuring metrics, and displaying those metrics for the people that need to see them.
Finally, we heard from Andrew Gulovsen, Hubtek’s CMO. He says that when tracking performance metrics, logistics companies need to focus on those that truly lead to the goals they’re trying to achieve. While many are simply a way to measure the performance of a particular activity, they should always be aligned with the goals and objectives of a company.
“It can be a frustrating effort to see positive metric numbers but still be unable to achieve success. Start at the goal and work backward in building out metrics and KPIs. Whether your goal is around the financial perspective, throughput, or efficiency areas, it’s best to start simply and then look at ways to improve each over a particular time frame, whether daily, weekly, monthly, or quarterly. The metrics should be simple to understand, simple to measure, and aligned to what you’re trying to accomplish.”
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