warehouse employee

Many factors are challenging the status quo in the logistics industry, like changing customer expectations and new regulations. This volatility is adding to the pressure of what already is a very competitive landscape — and is leading managers to look for new and innovative ways to trim costs, be more efficient, and boost customer satisfaction.

Here are five common practices that may be damaging your organization's operational performance and viable solutions to go along with them:

  1. Using only your overall business strategy to guide performance improvements. Understand how your company competes and set goals that align with the overall business strategy. A 2018 WERC survey found that 50% of respondents identified customer service as their top strategic business focus — a 25% increase from 2015.
  2. Measuring every single aspect of your operations. Focus on performance metrics that best align with strategic priorities to help deliver sustainable value and quality.
  3. Not having a dedicated effort for developing the right partner network. Establish open communication and transparency with supply chain partners — for effective collaboration and efficient issue resolution.
  4. Ignoring the performance of your industry peers. Optimize performance through benchmarking — to help identify critical gaps and gain valuable insights to improve operational processes.
  5. Accepting good as "good enough." Track, measure, and analyze performance and improvement to stay the course, and continuously evaluate key metrics' relevance to ensure their alignment with your business strategy. The WERC survey showed that best-in-class performers maintained performance on 14 of the 34 metrics compared to only seven for major opportunity performers.

Process is an important component of any company strategy, but it plays an especially critical role in the logistics industry. But with so many ways to measure effectiveness and productivity, disconnects can emerge between the metrics you’re tracking and the goals your organization is trying to achieve. By establishing metrics that align with the overall business strategy, coordinating goals and measurements with partners, benchmarking against best-in-class industry players, and staying the course, you can identify critical performance gaps and take steps to drive continuous improvements for competitive advantage and bottom-line results.

Check out our white paper titled, Five Practices Damaging Operational Performance in Today’s Supply Chain
 

Published: Monday, August 19, 2019