Guest Post by Mike Challman: How to Measure & Improve Freight Management Performance: 6 Critical Key Performance Indicators

This week I’m adding a guest post from Mike Challman, VP, North American Operations for CLX Logistics.

 

Supply chain management is defined as the active streamlining of a business’ supply-side activities to maximize customer value and gain a competitive advantage in the marketplace[1].

Yet, as supply chain industry professionals can attest, there’s a plethora of strategies you can employ to maximize value and efficiency.

Most companies turn to a third-party logistics (3PL) provider for help because they have not just market-intelligence and expertise at their disposal, but also proprietary technological advantages such as transportation management systems (TMS).

Optimizing Freight Management with TMS

Logistics providers often create these intelligent software platforms to enhance supply chain visibility and optimize freight management. These programs are increasingly popular amongst the supply chain management (SCM) and logistics community. In fact, the TMS market was valued at $6.85 billion in 2013 and is expected to reach $19.2 billion by 2022, according to Transparency Market Research.

TMS software helps manage your carrier network and address inefficiencies in your freight management processes that are otherwise difficult to diagnose. For example, should your product utilize intermodal transportation methods?? Which route will be the most cost-effective and eco-friendly?

Measuring Your Performance

Although ROI is the most obvious metric for determining the success of your SCM, don’t overlook other performance indicators of your freight management process.

Safety is a crucial consideration, especially if you’re transporting heavy or hazardous material on behalf of a client. Regularly review regulations in the United States (and other countries, if transporting globally) to ensure compliance.

Another matter of importance is route guide compliance. Are the directives being properly communicated and carried out? If not, this could be an opportunity to bridge an internal gap.

Optimizing Operations

Learn about the remaining freight management KPIs and how to fine tune your reports to properly measure them in the infographic below.

 

 

Mike Challman, VP, North American Operations for CLX Logistics. CLX is a global provider of transportation management, technology, and supply chain consulting services.

[1] http://www.investopedia.com/terms/s/scm.asp