The most relevant KPIs for TMS

KPI para transporte TMS

6 indicators you should consider if you want to optimize transportation.

In the competitive world of transportation and logistics, efficiency is key. A Transportation Management System (TMS) has become a fundamental tool for companies seeking to optimize their operations. However, to assess its effectiveness and continuously improve, it is crucial to understand and measure the associated key performance indicators (KPIs). These KPIs not only provide insight into the effectiveness of the TMS but also highlight areas of potential improvement. In this article, we will explore some of the most important KPIs in a TMS and their significance in logistics management.

Key Performance Indicators (KPIs) serve two basic functions: Measure the performance of your company's transportation in a way that allows you to keep track of the most important indicators and ensure their comparability over time. Identify areas where solutions can be sought to optimize daily operations.

1. Cost per shipment

One of the most basic yet fundamental KPIs is the cost per shipment. This involves calculating the total transportation cost per unit of cargo shipped. This KPI can be further broken down to include components such as fuel costs, transportation fees, packaging costs, among others. By monitoring this KPI, companies can identify opportunities to reduce costs, whether it’s optimizing routes, consolidating shipments, or negotiating more favorable rates with carriers.

2. Transit time

Transit time refers to the time it takes for a shipment to move from the point of origin to the final destination. It is crucial for ensuring customer satisfaction and maintaining operational efficiency. An effective TMS should provide accurate data on actual transit time versus planned time, enabling companies to identify bottlenecks and improve route planning.

3. Inventory accuracy

A good TMS not only handles the transportation of goods but also manages inventory. Inventory accuracy is an important KPI that measures the alignment between the inventory recorded in the system and the physical inventory. This is crucial for avoiding inventory errors, losses, and delivery delays. Having physical inventory consistent with what the system reflects enables the TMS to optimize routes based on the whereabouts of the items that need to be moved, ensuring that when it arrives at that point, they are ready to be loaded onto a vehicle and reach their destination on time.

4. Percentage of full truck load

This KPI evaluates the efficiency in utilizing cargo space. A high percentage of full load indicates optimal resource utilization, while a low percentage may signal inefficiencies in load planning. By optimizing this KPI, companies can reduce costs and minimize environmental impact by reducing the number of partial shipments. A company can use the percentage of full load as an indicator of the effectiveness of its cargo consolidation processes and route planning. By increasing the percentage of full load, the company can reduce the number of trips needed to transport the same amount of goods, thereby reducing operational costs and carbon emissions.

5. Order fulfillment and delivery time compliance

Order fulfillment measures the TMS’s ability to meet promised delivery deadlines to customers. This includes both punctuality and accuracy in delivery. A high level of order fulfillment is essential for maintaining customer satisfaction and brand reputation. Monitoring order fulfillment is a key indicator of customer service quality. Ensuring that orders are delivered on time and in optimal conditions can enhance the customer experience and foster brand loyalty.

6. Labor cost

In addition to direct transportation costs, labor cost is also an important factor to consider. This KPI evaluates the efficiency in human resource allocation, including route planning, loading and unloading of goods, and administrative management. By reducing labor costs, companies can improve their profitability and competitiveness. If we manage to reduce labor costs while maintaining good performance in other indicators, we can infer that the company is becoming more efficient in its transportation processes, having a team with experience gained day by day, and a transportation system that adds value to optimize the entire process.

In conclusion, performance KPIs in a Transportation Management System are fundamental for evaluating and improving logistical efficiency. By monitoring and optimizing these KPIs, companies can reduce costs, enhance customer satisfaction, and maintain a competitive advantage in the market. An effective TMS not only facilitates transportation management but also becomes a strategic tool for driving business success in the complex world of modern logistics.

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