Considering how fast-paced today’s business environment has become, logistics management is key to any organization’s success. Efficient transportation helps maintain a streamlined supply chain while attaining customer demands.
Carrier performance monitoring comes in handy when looking to manage logistics effectively. Tracking your carrier’s performance enables you to spot improvement areas to optimize the supply chain while ascertaining the timely delivery of materials and goods.
Effective carrier performance monitoring lets you spot cost-cutting opportunities and minimize transportation costs. It also boosts logistics efficiency while elevating customer relations. In this article, we’ll discuss how to monitor carrier performance.
- Set clear, realistic goals and expectations
Effective carrier performance monitoring requires you to set clear, realistic goals plus the expectations you have of the carriers depending on:
- Customer requirements
- Your operational needs
- Industry standards
For instance, you can set goals for damage-free shipments and accurate documentation. Communicate your expectations and goals to your carriers and be open about the KPIs (key performance indicators) on which your assessment will be based. You should also agree on penalties/ rewards for falling short of or meeting targets and issue escalation procedures.
- Track and evaluate KPIs
KPIs come in handy when seeking to measure carrier performance effectively. Tracking and evaluating key metrics lets you determine if a carrier meets your goals and expectations. Some of the metrics to track when monitoring carrier performance include:
- On-time delivery (OTD): Monitoring on-time delivery metrics enables shippers to complete in-depth carrier network analysis and spot top performers with regard to accuracy and timeliness. Conversely, carriers can determine where they aren’t performing as expected and how to improve
- On-time pickup (OTP): Tracking this KPI lets shippers examine their data to determine better the time, location, and data a particular carrier has a poor on-time pickup
- Missed pickups: Monitoring missed pickups enables shippers to better determine the at-fault carrier and why
With the help of carrier performance monitoring tools such as carrier scorecards, you can better understand your supply chain, gain greater visibility into your transport operations, and come up with more precise delivery estimates.
- Perform regular audits and reviews
Performing regular audits and reviews of carrier procedures and operations is another carrier performance monitoring method. Audits and reviews are structured and impartial evaluations that help you verify and authenticate your carrier’s performance, improvement, and compliance. These tasks should be conducted at least once a year or more regularly, if need be, based on your opportunities and operational risks.
- Offer recognition and feedback
Offering recognition and feedback is crucial when monitoring carrier performance. Feedback helps:
- Identify strengths and weaknesses
- Resolve issues
- Boost performance
You should give your carriers specific, timely, and constructive feedback depending on your observations and data. In addition, you should recognize and award your carriers for meeting and surpassing your expectations and goals by giving bonuses, incentives, and more. By giving feedback and recognizing your carriers, you can develop loyalty, collaboration, and trust with them to better service quality.
- Perform constant improvement
Carrier performance monitoring isn’t a one-time thing. It’s a process that needs continuous improvement. With the help of the feedback, data, audits, and reviews from your performance monitoring activities, you can spot problems, gaps, and improvement opportunities.
You can collaborate with carriers to develop solutions to address any issues and boost performance. Track your improvement activities and adjust to changing customer requirements and operational needs.
Endnote
Effective carrier management helps spot improvement areas and enhance internal operations. Learn how to monitor carrier performance to optimize your supply chain.
