4 Metrics Your Distribution ERP Should be Tracking
There are hundreds of possible distribution metrics outlined in the textbooks and all have some value. The few that are important to your business relate to your particular goals. Those few are known as key performance indicators or KPI. They need to relate to your goals, they should be available automatically from your distribution ERP as transactions complete. Everyone should know how the distribution ERP metric is calculated and how their jobs affect those metrics. Here are a few essential points of data you should be tracking.
Rate of Perfect Order Completion
You need at least one distribution ERP metric that indicates your customer satisfaction. Perfect order completion means every line of an order is shipped complete and on time. Your customer doesn’t want the baseballs and not the bats. And she doesn’t want either after the season is past. Bragging of 99% on time is meaningless if you miss 1% of each customer order.
Cost per Order Shipped
Are you spending too much? Add up payroll, the electric bill, maintenance on your forklifts, and payments on your distribution ERP system. All the bills have to be paid. Are shipments down? Have you reduced payroll to match? Your business is variable and this measure helps watch overall costs related to today’s volume.
Dollars per Line Shipped
You should have a revenue metric to keep things in balance. If you ship a lot of simple orders only moving a box to the UPS truck, this indicator will go down. If you have a lot of more complex orders where each one needs to be finished with a particular color faceplate and individually boxed for shipment, this will go up. Your business is variable. If the revenue per line is falling, you might need to reduce costs or look for a different mix of customers and products.
Dock to Stock Time
You should be tracking efficiency through distribution ERP metrics. These will highlight your throughput speed. How many minutes did it take yesterday from the moment a delivery truck arrived until the products were all received and placed in bins? If you can’t find it, you can’t ship it. If you put it away quickly, you probably are picking and shipping quickly too.
Imagine yourself at a sporting event. Time is moving on the Jumbotron. The scores for each team are in huge lights. Other statistics such as number of fouls, balls and strikes, remaining substitutions, etc. are shown in smaller lights. What metrics are on your company Jumbotron?
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