One of the best things about my job is that I get the chance to work so closely with supply chain leaders and their teams as we collectively uncover new ways of extracting value out of real-time supply chain visibility. Yes, we’re still at the relative beginning of this exciting movement. At the same time, supply chain leaders who, for decades have been starved for visibility, are now rapidly becoming data-driven as more shippers and their carriers get connected and share information. As we keep saying, more shippers = more data = more potential value.
It’s actually a pretty radical development: We can finally measure things! But now that we have visibility and data and the ability to measure, what exactly are the metrics that matter? Put another way, now that you can see, where do you focus? And how do you leverage the right metrics to maximize business value as you implement supply chain visibility across your organization and carrier networks?
Here are a few places to start, based on what I’ve seen working across the FourKites network:
You don’t need to track every truck or every load to realize value. Many shippers spend a great deal of time and effort tracking compliance and consistency. (In short, a carrier’s compliance rate represents the number of loads they tracked compared to the number of loads a customer has sent out with that carrier. Consistency takes into account how well a load is tracking—e.g., perhaps a carrier is only sending pickup and delivery notifications vs. another carrier who is sending data at 15-minute intervals throughout the course of its journey.)
These are really important metrics. At the same time, they are lagging indicators. In other words, they are bottom line indicators of how well you’ve implemented visibility across your organization and supply chain.
The most successful shippers drive improvements to these metrics by more actively engaging with their carriers and truly operationalizing their data. To do so, they monitor a variety of leading indicators that help them continue to proactively move the program in the right direction. These leading indicators include the following considerations:
What percentage of your carriers are ELD-compliant? Successful shippers leverage their procurement teams to require that carriers be ELD-compliant. They often have a defined process for communicating with business teams when bringing on new carriers.
Are you reducing the number of carrier check-in calls? As you gain visibility, you should be spending much less time on the phone chasing down the status of loads. Let’s be honest: You have better things to do!
Are you managing exceptions? It might seem counterintuitive at first, but there’s a lot of value to be realized in focusing your energy on the exceptions, i.e., the loads that aren’t tracking at all, or those that will be late. We are seeing shippers adapt their workflows and processes to proactively manage the exceptions. For example, instead of issuing a monthly report to carriers with tracking metrics (e.g., “You tracked at 75% for the last 30 days”), shippers are setting up processes to connect with carriers on a daily basis about loads that aren’t tracking. Proactive, real-time conversations aimed at identifying the root causes behind exceptions are much more effective than post-mortem reports and conversations.
To that end, FourKites introduced a Consistency Dashboard last year to help shippers extract more value from their tracking data. For example, the tool enables shippers to view a map that isolates areas tied to low consistency. This specific capability has made it possible for shippers to pinpoint and fix operational issues in problematic distribution centers, including integration issues, appointment inconsistencies, carrier integration problems and more. But regardless of the platform you’re using to gain visibility across your operations, these are critical areas to be paying attention to.
Keep in mind that supply chain visibility is a journey, and it’s one the industry has only recently embarked upon. Part of getting off on the right foot is to be thoughtful about your leading and lagging indicators. What metrics are you tracking, and what’s helping you get value from your visibility platform? I’d love to hear your feedback and share more lessons from our community!