Logistics Metrics and KPIs

Solop gives you the best Logistics indicators so that you can evaluate the performance of your company with simplicity.

What are they and what are they for?

Logistics Key Performance Indicators (KPIs) are essential to evaluate and improve the efficiency of a distribution company’s operations. Let’s look at some of the main indicators for this industry, along with their definitions, purposes and calculation formulas:

Let’s see what are the main KPIs that you can use in your business:

 Inventory rotation

Order Accuracy

Order Cycle Time

Return rate

Total Logistics Cost as a percentage of Sales

E-BOOK

We designed the definitive guide to help you select the ideal KPIs for your type of business and learn the importance of implementing dashboards in the daily management of your company.

You will be able to define indicators for any measurable activity and these indicators will help you know at any time if the performance is aligned with the defined objective.

Inventory Turnover Rate:

 

It measures how often a company’s inventory is sold and replaced in a given time period.

– Purpose: Evaluate efficiency in inventory management, minimizing the risk of obsolescence and ensuring rapid product rotation.

Formula:

Inventory Turnover Ratio  = Cost of Goods Sold / Average Inventory

Order Accuracy:

Measures how accurately customer orders are fulfilled correctly in terms of quantity, quality, and specific products.

–  Purpose: Ensure customer satisfaction and minimize returns and costs associated with fulfillment errors.

 

Fórmula:

Order Accuracy = Correct Orders / Total Orders

Order Cycle Time:

Measures the total time required to process an order from the time it is placed until it is delivered to the customer.

– Purpose: Optimize operational efficiency, reduce delivery times and improve customer satisfaction.

Formula:

Order Cycle Time = Order Delivery Date – Order Reception Date

Return Rate

Measures the percentage of products that are returned by customers in relation to total sales.

– Purpose: Evaluate product quality, identify supply chain issues, and effectively manage returns.

Formula:

Return rate = Number of Returns – Total Sales

Total Logistics Cost as a percentage of Sales:

 

Measures the total cost of logistics operations in relation to the company’s total sales.

 -Purpose: Evaluate efficiency in managing logistics costs and optimize profitability.

Formula:

Total Logistics Cost as a Percentage of Sales = Total Logistics Cost – Total Sales