Achieving efficient distribution and delivery for better performance
Distribution and Logistics includes managing quality, cost and timeliness of distribution and delivery. In the short term, Operations must use the most efficient routing, scheduling and equipment. Over the long term, it should determine how to reduce mileage costs, improve delivery execution and exceed customer service needs.
Many companies work with third-party carriers, distributors, or wholesalers for their expertise. While outsourcing makes sense, it does mean you have to manage the risks that come with loss of control. This requires negotiating and monitoring distributor agreements with clear terms and commercial guidelines.
With the Distribution and Logistics decision area, you can set planning goals and scorecarding metrics for these elements to improve your performance management:
- Damaged units (% and $).
- Distribution cost ($).
- On-time unit delivery (%).
- Price / lb / 100 miles ($ and #).
- Average actual and quoted lead days (# and %).
- Delivery frequency (#).
- Order size (#).
- Shipments on time / total shipments (#).
Most importantly, you can analyze these goals and metrics by a number of dimensions to find the hidden gems in the data:
- Fiscal month / year.
- Brand and product line.
- Customer.
- Carrier / distributor.
- Carrier activity / region.
- Shipment type
- Location
Using the Distribution and Logistics decision area
You set targets based on your goals and metrics in Distribution and Logistics. You monitor your success by looking at how you measure up against your targets. Further, you dive into your results to find out more about these elements the lead to performance management.
- On-time unit delivery (%): What percentage of our products are delivered on time? Are we trending up or down?
- Distribution cost ($): A nearby plant is shipping to the same destination. Can we save money by consolidating?
- Delivery frequency (#): Can we increase our delivery frequency if we leverage third-party distribution warehouses?
