Empty Talk Without Execution Fails KPI’s – Part 1
Four Core Measures To Achieve The Set KPI Targets
In my previous post, I talked about the importance of identifying, defining, setting targets for, and prioritizing KPI’s to measure the performance of a shipper’s supply chain (as well as for one’s life, but at the risk of hubris I’ll stay focused on transportation management). If you can’t measure it, you can’t improve it. Establishing KPI’s is the first step of a larger approach for continuous improvement. The next step is to take an inward look at the current transportation execution and management process work flows. With the KPI plan set, now it’s time to work that plan.
I. Document The Current Work Flows
As an organization strives for continuous improvement within their transportation management, not only is being able to measure performance critical, but so is documenting the current work flows that are being operated to achieve the set KPI targets.
Documenting the transportation execution and management process work flows along with the associated SOP’s should not be an exercise isolated to logistics alone. All departments including, but not limited to transportation, shipping, warehouse, manufacturing, customer service, finance, and maybe others, depending on the company, should be engaged.
II. Gap Analysis & Pain Points Discovery
Once there is a clear understanding of how the transportation execution is currently being managed then the next step of gap analysis and pain point discovery can be done.
As the current transportation execution and management process work flows are being documented “real-time”gap analysis will happen, but it is important to have a formal exercise to identify the pain points within those current work flows that may have an impact on the set KPIs.
Again, stakeholders from multiple departments should be part of this assessment so a comprehensive review is done to get a complete understanding of where changes need to be made in the current operations so the KPI targets can be achieved.
III. Create Solutions To Close The Gap
KPIs are established, current work flows documented, pain points identified; next is creating solutions to close the identified gaps that are causing pain points within the transportation execution operations.
Internal knowledge, industry best practices, and other process changes can be implemented to close these gaps, but ideally, technology, like a transportation management system (TMS), is leveraged as well to support the improvement of the current operations.
Technologies like a TMS can help a shipper maximize productivity, save time, and enable faster, better decision making. When utilizing the right TMS it can create value for a shipper by reducing costs, increasing visibility, and providing greater flexibility as changes occur within their network. With a combination of technology and process change a shipper can quickly and more efficiently close the gaps within their transportation execution operations to aid them in achieving their KPI goals.
IV.Prioritize Work With SOPs
Once solutions have been created to close the gaps of the current operations pain points then future, ideal-state transportation execution and management processes need to be created along with the associated SOPs. This will be the way moving forward that the transportation will be executed and managed to ensure KPI targets are met.
“Plan your work, work your plan.” With KPIs established and operations optimized a shipper can now begin to work their plan. Implementation and change management will be critical to success and should not be overlooked by a shipper. Again, stakeholders from multiple departments should be engaged to ensure success. Once operations are live the next step will be to measure and monitor the set KPIs. To guide in doing this, in my next post I will talk about the importance of accurate, actionable data along with user-friendly and easily accessible reporting and business intelligence.
Adam Davis：VP of Managed Services in oTMS, responsible for SaaS TMS, transportation process control and consulting services, with 16 years senior management experience. General Manager of TMC Asia Pacific in C.H. Robinson since 2010.