5 Tips for improved insight and better Key Performance Indicators
Although Key Performance Indicators (KPIs) vary per company, they are essential for adequate decision-making within the scope of the strategic objectives of each individual company. However, defining KPIs often turns out difficult, also because outcomes of measured values do not reflect reality as it is, which in turn affects the definition of strategic business objectives intended for assessing the company’s own performance against its competitors.
So what are the most important KPIs, and how to retain insight?
1. Billable hours
The number of ‘billable’ hours is crucial to service-providing companies. For the transports and logistics sector this may be interpreted as: extra hours generated by realising time savings.
Time is an important factor in the world of transport, and saving hours implies a great advantage. Actively approaching this KPI will enable you to search for possibilities of better returns on hours within the scope of your current business objectives. You could for instance consider increased efficiency of your records department by introducing innovative tools. This may already yield big returns without requiring many changes and mutations on your part.
2. Project pipeline
Adequate prognoses will bring the most realistic picture for the near future. Complete and adequate insight in your pipeline will give you the security you need and will improve control of your company’s future. For instance, a CRM system, together with the insight that it affords in all your business activities, will bring you the overview you need. Another important element for you is to study your options on the basis of current data. Data analysis of items like fleet and fuel usage or the most efficient routes to your clients will result in more efficient use of your pipeline. This KPI may be shaped better by using an online reporting tool.
3. Turnover leakage
Loss of profit on sales is a very costly KPI in most cases. It can often be blamed on sloppy procedures and lack of care in the records department. Consider for instance billing errors, time losses when entering and recording hours and purchases, or incorrect time sheets. More efficient procedures will offer you the security you need if you want optimal returns on sales and narrower error bands. One of the supporting pillars is error-free billing, accompanied by a full overview of your payments. An online reporting system like eReporting will give you a firm foothold in your records department. and optimal cost control.
4. Outstanding sales
‘Outstanding sales’ is another decisive indicator apart from turnover leakage. More flexible use of tools that simplify your records will give you a better view of your outstanding sales at an earlier stage, followed by the possibility of instant action. A steady cash flow is crucial to any company; transparent records will advance your business.
5. Project margin
Each trip carried out by the transport and logistics business may be considered as a separate project. Each covered route will, after all, have its corresponding margins that may vary by the day. Efficient, yet flexible operations are important for you to retain a clear insight in this KPI and can be achieved by using administrative tools. Insight is the key to studying your margins and giving them prominence in decision-making.
Proper insight in KPIs will give you the possibility of making substantiated choices regarding your strategic business objectives both now and in the future. This view is also supported in a report by the Dutch ING Sectormanagement Transport and Logistics named Entrepreneurship in Transport and Logistics (‘ondernemerschap in transport en logistiek’). It gives a refreshing view on determining future strategies, leadership and controlling information and the degree to which a proper mix of management qualities and entrepreneurship may be crucial in this respect.
If you want to attain operational excellence there are many tools with instant possibilities for you to take the lead, which will certainly give you and edge among your competitors!
You drive, we care!