KPI Logistics: When You Love You Don't Count?

September 24, 2020

Hiring a wagon costs a company between 10K to 15K€ per year. The investment is consequent, and yet the operating manager

Plea for a performance logic in rail logistics

Hiring a wagon costs a company between 10K to 15K€ per year. The investment is consequent, and yet the operations manager in charge of optimising it generally only has fragmented and poorly automated information on the behaviour of his wagon. How many journeys has he made? How many days did he spend in maintenance? How much did this wagon earn me in terms of goods transported? These are all logistics KPIs that need to be monitored regularly.

It is often said: "when you love, you don't count"... but the saying hardly applies to logistics and rail. In order to remain competitive and gain in efficiency, the rail mode resolutely needs performance statistics. For you, operations manager, supply chain manager or optimisation project manager, a reliable and automated business intelligence tool could help you achieve your objectives.

Outdated and time-consuming railway reporting tools

Railway undertakings and shippers have put in place several methods to collect data on their wagon fleet and its use :

  • Purchased train paths and waybills are often compiled in an Excel file.
  • E-mails are regularly sent to notify of the progress of the trains.
  • Telephone calls were made to partners to inquire about traffic, car availability and the smooth running of operations.
  • Physical inventories are carried out by a person directly in the field.

This data can then be used for reporting purposes. It is used to determine various logistics KPIs. For example, you can calculate the service rate, the average number of rotations, or the loading rate of the plant.

However, if you are already responsible for such reporting, you may have already wanted to automate these data retrieval methods. The information is scattered or not up-to-date. Sometimes it is simply not centralized. This is often the case, for example, for the time spent in the workshop.

In the absence of reliable indicators, the implementation of optimization policies proves to be delicate. But as soon as you have activity statistics, you can start to adapt your practices and deepen your performance logic.

Anything that can be measured gets better!

At Everysens, we believe that everything that is measured gets better.

In order to make progress, we must first take stock of the situation. By measuring your performance via dashboards, you will be able to analyse your operations more finely and increase your operational efficiency.

Anything that can be measured gets better, and anything that gets better means profits! Lack of data centralization is a source of financial losses. Logistics is a business where margins are limited and there are many players. Regular performance measurement is therefore crucial.

In this context, the Internet of Things technology is an opportunity because it considerably increases the amount of data available for analysis. Our logistics optimisation platform centralises this data in real time and extracts reliable performance statistics from it, which are automatically updated and adapted to your business. A utopia? No, it is not.

A concrete example of a logistics KPI: the utilization rate

Our platform calculates the fleet utilization rate. Parameterised according to the customer's business realities, this indicator enables us to know the real use of the fleet and to identify the phases in the life of the wagon that require optimisation. The statistics make it possible both to dispassionate discussions with service providers and to focus on solutions.

The granularity of the indicator makes it possible to start with simple, but snowball effect optimizations. Putting a wagon back into use after a retention period is a small-scale action. However, when taken together, these actions make it possible to reduce the unavailability rate. And why not resize the park! A lot of savings in perspective...

Adapt your indicators to your business challenges

So the idea is not to build a KPI mill without purpose, but to have keys to read, adapted to your business and your challenges, what works well and what doesn't, to know why, so that you can implement best practices. Elisabeth Briand, Supply Chain Director at Conforama, confirms this.

"The objective is to spend more time on improving the indicator than on how it is calculated".