What are the key factors to optimize and measure on when sending parcels from your warehouse? We have asked experts in the field and gathered a number of key performance indicators (KPIs) that every logistics and warehouse manager should know.
The process behind a shipment can be split into several parts, each of which can be measured and optimized. KPIs are objectives which an employee or a department can work towards in order to optimize a company’s processes.
We have asked experts about which KPIs are most valuable to measure when you want to optimize shipment and delivery processes in your business. Here are their answers.
The process of picking of goods can be divided. You can affect the overall speed by optimizing every single part. Therefore, picking speed depends on several factors: how the order list is designed in relation to the location of the products in the warehouse, time devoted to picking of goods, the size of the products to be picked, and whether picking is done by robots or humans. A KPI for picking speed can therefore vary a lot. A concrete example of a KPI for a warehouse with 250,000 different small items may be picking 30-60 order lines per man per hour. - Transport Director, Fredrik Krysén, Aditro Logistics.
2. Label print
You can increase the speed in several ways, when your parcel has to be labelled with the correct transport label. Firstly, integration and reuse of data from backend systems is important, as you save time compared to manual typing of information. You'll also save time by automating the choice of shipping method through a system of rules. Once everything is correctly set up, it must not take more than 1 second from the order number being scanned and retrieved from another system to the label being produced. This is not the case for all warehouses, which is why many would achieve significant optimization by automating this. - Vice President, Steffen Pasgaard, Consignor.
It is faster to pack a shipment when the package has the correct size for the specific product. Therefore, it is often worth the effort to choose a slightly more expensive cardboard box if it means faster packing and thus time and resource savings. In general, it is important to optimize your packaging as best as possible. If you use stretch film for your shipments, you can often choose a lower thickness of stretch film, which adds several meters to the roll. This means fewer roll changes on the machine and faster packaging speed, so you can use your time on other tasks. - Sales and Marketing Director, Michael Simonsen, STOK Emballage K/S.
Read more: 7 tips: The best way to pack your shipments
80-90% of the customer experience depends on the delivery, and transparency and on-time delivery is essential. Therefore, it is important that you are able to quickly and easily track shipments when customers call wanting to know the shipping status of their parcels. We have reduced the customer processing time from 70 seconds to 15 seconds when customer service track parcels for customers, as we now do it in an online portal, which is regularly updated with status on the shipments we produce. Thereby, we are able to immediately track parcels by logging on to the portal online without disturbing the different carriers, as all shipment numbers are captured in one complete system. Customers can also track parcels by themselves in the portal. - CEO, Jesper Hvejsel, Firtal.
5. Delivery time
Geography and service affect the time of delivery of your shipments. Day-to-day delivery is widespread in small geographies; great distances take 2-7 days while one-hour delivery is gradually becoming an offer in urban areas where the location of the warehouse allows this. Delivery time is a parameter that is increasingly focused on - and several carriers position themselves with new services particularly related to delivery time delivery in the evening, on the weekend or next day to (for example) the Middle East can mean the difference between getting the order or not. When using delivery as a competitive tool, it is important to measure the effect of your choice: On-time delivery is an important KPI for all senders - especially when you have made a commitment to the receiver to deliver within a certain time frame. KPI for on-time delivery must therefore naturally be as close to 100% as possible. - Vice President, Steffen Pasgaard, Consignor.
Read more: City distribution: an increasing challenge for logistics providers
6. Return time
Attractive return options as well as simple and efficient returns management at the warehouse is important. When we receive returns at the warehouse, we register the product with a few clicks and use the invoice number to identify the order in a return portal. Both customers and customer service are able to track returns in the portal. When customers print return labels from our site, they fill out a form as to why they want to return the item e.g. wrong size, credit or repair. That way we can more quickly handle the return, and the customer gets a faster processing. It maximum takes two days from when we have received the return at the warehouse to the customer receiving a refund. Generally, it is important to keep the number of returns at a minimum by using good product descriptions, product videos, size guides and FAQs. - E-commerce Manager, Jonas Larsen, Friluftsmagasinet.
About Our Experts:
- Aditro Logistics is the Nordic's largest carrier independent 3PL actor.
- STOK Emballage K/S are experts in packaging and packing methods.
- Firtal acquires and runs online shops. They currently own 9 online shops in Norway, Sweden and Denmark.
- Friluftsmagasinet is Norway’s biggest outdoor online shop.
- Consignor develops Delivery Management software for online shops and logistics companies with the purpose of streamlining and simplifying shipment processes.