The success of a logistics company is measured by its ability to deliver products to customers on time, within budget, and without damage. Logistics companies play a vital role in the global economy, and their success is essential for businesses to operate efficiently and effectively. According to the website Zipline Logistics, “Management guru Peter Drucker famously stated, ‘If you can’t measure it, you can’t manage it.’ Controlling the performance of business operations, which includes your supply chain and transportation, is nearly impossible without logistics metrics and data analytics.”
We spoke with experts in our company, and this is what they had to say:
Andrew Gulovsen, CMO at ProfitQuest powered by Hubtek, stated that while there are many ways to measure individual performance, the success of the overall organization must be tied to the organizational goals. These may be, and some probably will be, related to the financial component.
“Sometimes the big swath goals of revenue expansion may be simple but don’t make fundamental changes and improvements in the workflow of the company, and may lead to poor practices when the market turns unfavorable. It is important that these measurements don’t exist within a vacuum, either just within the company, or even within a particular context. As an example, revenue growth of 20 percent may be the goal, but if that growth isn’t profitable growth, or if the larger market is averaging say, 35 percent growth, it may not be as ideal or successful as intended.”
“The goal should be tied to particular behaviors within the company. Some examples are, improvements in collections (which leads to improved cash flow), margin expansion (improving profitability), reductions in turnover (thus improving efficiency and ultimately profitability), and increasing the number of loads per carrier used. This also increases efficiency and reduces the risk of some of those one-and-done carriers that are just pulled off the load board. And then, improving the throughput of employees, again, increasing efficiency and ultimately, profitability.”
“You want to be thoughtful about what you want to measure and how it aligns to the overall development of the company. Network with other leaders in the industry to understand the dynamics of the market and how others are navigating it. Utilize resources such as cohorts and coaches, to provide additional perspective and insights that may challenge your assumptions and help you build a stronger organization.”
We also heard from Carlos Gonzalez, Account Manager at Talentek powered by Hubtek. He said that for him, this question can be a little bit tricky, even when he’s thinking about how to measure success in his own personal life, but in terms of what he thinks can help generate success in the logistics industry, he shared the following:
“The first thing I will say is ensuring customer satisfaction. There are so many ways to increase that level of satisfaction from your customers. It can be as a result of collecting and responding to feedback, one-on-one feedback, or surveys. There are different strategies you can implement to be able to know what your customer thinks about your processes, what your customer is thinking about what you’re delivering, and if you’re actually meeting their expectations. But to me, the bigger one is definitely automation, or technology adoption, which enables you to do more with less and allows your human champions to engage in activities and decisions that benefit the company, and not just sitting at their computer doing the same routine work all day long.”
“Carrier performance is definitely something that we have to evaluate, including on-time delivery, rates, and claims. If you have been after a shipper, chasing that customer for a long time, trying to prove that you are doing things in the right way to get their business, but you don’t have a good team of carriers, it can make you look bad from the first pick-up and delivery.”
“Additionally, profit margin, or bringing more ROI to your company, can be a little bit complicated nowadays, but it’s something that you must double check. You have to be able to examine profit margins, gross and net, to ensure that your company is in good financial health. Finally, look for ways to be more efficient internally, to be able to offer better prices in this tight market. One of the ways to do that is to start looking at nearshore staffing, working on a transactional basis.”
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