5 Steps For Successfully Utilizing Transportation DataWritten by Neal Willis
You should start following your transportation data and measuring performance metrics, if you’re not already doing so. Keeping track of transportation metrics allows you to screen provider performance over specific periods of time, and whether it’s cost reduction, improved efficiency, and/or enhanced service performance, successfully leveraging your transportation data for continuous improvement involves five steps: 1) Understand The Metrics, 2) Identify Weaknesses, 3) Set Improvement Goals, 4) Institute Corrective Action, and 5) Monitor & Adjust.
Understand The Metrics
Keep in mind that simply measuring and monitoring metrics doesn’t solve problems. Keeping record of the metrics simply allows you to identify glitches. In order to truly benefit from the information, it’s important to understand the meaning of what you’re measuring and what the measurements say as to the condition of your supply chain. You may find others are better suited to match your particular industry or business needs, but common metrics such as transit time and on-time performance percentages are routinely monitored by shippers, carriers and supply chain analysts alike.
Transit time - measures the amount of time it takes for a shipment to arrive at its intended destination from the time it leaves the shipper’s dock. It’s normally measured against a standard amount of time for each lane (by carrier). Keep in mind that carrier transit times are estimated and not guaranteed.
On-time pickup % - measures the amount of shipments (by carrier) that are picked up on time.
On-time delivery % - measures the amount of shipments (by carrier) that are delivered on time.
Once you grasp the concepts and understand what you’re measuring, find a good benchmark for which to measure your information against and identify the weak spots in your supply chain. For example, you may choose to benchmark against other similar companies or industries. Nonetheless, try to benchmark against something comparable and relevant.
Set Improvement Goals
Be realistic in your goal setting. You don’t have to hit a home run right out of the gate. For example, you might elect to set a target percentage amount of improvement over a certain period of time.
Institute Corrective Action
Before any plan is enacted, it’s important to convey the changes you’re sanctioning to all areas of the business that could potentially be affected. Once that’s done, you can then put the plan into action. Try not to implement a plan with negative consequences in other areas. Fixing one problem while creating others doesn’t necessarily prove to be beneficial.
Monitor & Adjust
Once you have your plan in place, closely monitor the results of the new process to determine if the changes are producing the desired outcome. If not, adjust accordingly and repeat the process.
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