In hazardous material storage, as with all types of third-party logistics, metrics are a key in understanding how well a 3PL provider is performing. The ability to monitor and evaluate key performance indicators (KPIs) is crucial to quantifying the value created by using a 3PL. After all, a company needs to know that the use of a logistics partner and the efficiencies they provide justifies the cost of their services, otherwise it would be better to bring in house those warehousing, transportation and other supply chain functions they manage for the business.
When choosing a 3PL partner the most important KPIs for a business should be determined and how these KPIs will be tracked and monitored and establishing performance goals should be discussed. During this process, a response plan should also be established that maps out actions to taken if these metrics should ever fall outside of expected performance levels.
Five of the most frequently tracked KPIs include:
- Percentage of On-Time Deliveries: If deliveries are not reaching customers on schedule, a business is at risk of losing a significant number of customers. Companies need to make sure shipments are arriving on time in accordance with the customer contracts.
- Freight Costs: The cost of freight is often a major component in the pricing structure for the products sold. A variety of metrics can be used to track freight costs; i.e., freight cost by mode of shipment, freight cost by customer, freight cost by location, freight cost per ton-mile, freight cost per case, freight cost per shipment etc.
- Percentage of Loads Accepted by Primary and Secondary Carriers: Companies need to know how their products are being shipped, so they can track shipments in transit.
- Total Order Cycle Time: A measure of efficiency and speed.
- Order Picking Accuracy: A measure of accuracy.
Ideally businesses want to be able to access KPI metrics in real-time or as close to real-time as possible, rather than having to wait for monthly, quarterly or semi-annual or annual reports. Working with a hazardous material storage provider or other 3PL that has implemented an online customer portal allows quick, easy access to the information needed from anywhere there is an internet access. In addition, these customer portals often feature customizable KPI dashboards. It’s all about maximizing visibility in real time – visibility to inbounds, shipments, inventory, parcel tracking and metrics. Companies want and need to see the data, generate reports and export data so that they can use it.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Missouri, Illinois and Indiana totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include general warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage and product distribution and fulfillment. FW Warehousing has more than 60 years of experience in third-party 3PL logistics and has been ranked in the top 100 Third Party Logistic companies in the country by Inbound Logistics magazine.
For more information visit the Hazardous Material Storage page of the FW Warehousing website.