Transportation Costs or Delivery on Time?
As we work with manufacturing companies, their carriers and suppliers on a daily basis, it sometimes seems like there is only one right perspective that creates value for all parties. However, logistics as an industry is evolving and different perspectives may appear on the table for discussions.
That’s why GoRamp has made a simple poll asking manufacturers which business indicators were the most significant for them and results showed that only 19% were focusing on transportation costs while 61% said that delivery on time is the most critical metric.
While both metrics are important, how is it possible to determine which one gives the right overview for you?
What to Consider when Tracking Delivery Effectiveness and Transportation Price?
Bookings on Time, Late and Not Arrived in Each Warehouse
As you seek to load your resources to the maximum capacities it is very important how your partners and service providers are helping you to do so. It is normal in transportation that many times schedules are changed or some other conditions changes which creates delays and carriers are late. On the other hand it is very important to be in control of the situation – to know precisely and on time how much from all booking were completed successfully and how many, unfortunately, were late or even did not appear to the gates of your facilities.
How Bookings on Time, Late and Not Arrived are Changing in Time?
While knowing the actual information you should be interested into trends as well. In order to evaluate if the changes implemented are causing positive increment to the metric, you need to start monitoring if the results are changing during longer period of time. Monitoring trends may also help you understand if the amount of resources you have is distributed in the most effective way. There are tools such as Warehouse management systems to help you monitor your processes efectively.
Planned and Actual Loading Time and Change on Time
After you managed to fix the most efficient flow for incoming and outgoing trucks in your warehouse during the day, you should pay attention to planning the time for loading for various type of cargos. Both actual and historical information is very important to identify if you are able to load trucks on time or maybe you are doing it much better than you planned. In both cases you can now make a decision based on specific information – either re-plan your daily capacities or make changes to improve the efficiency of loading.
Which Carriers are Most Trusted as of Key Metrics?
As we are focusing to optimize our overall transportation costs by improving processes in the warehouse, we should not forget about choosing the most important partners as well.
Looking to Improve Your Key Metrics?
Besides simply loading more and more cargos, there are few ways to increase the efficiency of your warehouse/s.
- Look for the root cause of “late” and “did not arrive” bookings. Late arrivals is making huge impact to the overall performance, thus, you should analyze if it is caused by delayed carriers trips, bottle-necks while entering facilities or maybe manufacturing itself is delayed and loadings/unloadings are postponed as a consequence. After you manage to successfully identify your problems there is nothing to stop you for improvements
- Check if your plan is relevant. In case you are saving time for your planned loadings, that might mean your capacity is bigger, which means you can do more during the same time. On the other hand, if actual time is always exceeding your plan, your resources might be overloaded.
- Praise your partners with more orders.
The logistics industry is diversifying quickly and to keep up with its standards you are constantly required to innovate and push the limits. That is the only way to keep on competing. It isn’t feasible to only base your decisions on either transportation costs or delivery on time and expect long-term success. Almost every contract and sometimes even every order can require to taking a hard look at your metrics and adjusting accordingly to make the best decision for your growth. That’s why it is key to constantly analyze and improve your metrics.
Transport Management System such as GoRamp could benefit your operations and Bauroc is a real life example. Book a quick call with our expert and find out how!
