15 Surprising Facts About Supply Chain KPIs
Key performance indicators (KPIs) are an essential part of sound supply chain management — at least that’s what 83% of your peers think.
But with all that data, and all those providers, and all your business objectives…there can be a lot of confusion.
How can you separate fact from fiction?
Using insights from your peers is a great place to start.
We unpacked a few of the insights from our supply chain KPI research study to help you debunk a few common misconceptions about logistics performance metrics.
Get The Truth About Supply Chain KPIs
15 Myths of Supply Chain KPIs — Debunked by Data
Learn what shippers and carriers said to avoid mistakes in your own supply chain, then download the study to get data-backed industry benchmarks.
CARRIER MYTHS
1. Carriers only care about your freight and your rates.
Wrong.
While cash flow is king for carriers, 97% of which are small businesses, that doesn’t mean they’ll always take your freight just because it’s ready and you’re paying.
90% of carriers take shipper KPI expectations into account before agreeing to move a load.
If you have a bad reputation for overly demanding performance metrics, you’re likely hurting your ability to secure capacity.
2. Carriers don’t take primary tender acceptance as seriously as shippers.
Nope. When the truckload market cycle hits an inflationary environment, it’s common to see carriers moving capacity into the more lucrative spot market, away from contract rates.
It follows that, in these markets, primary tender acceptance drops. But that doesn’t mean all carriers treat it that way.
In fact, carriers hold themselves to a higher standard than shippers, with 52% of carriers sticking to 95% or higher primary tender acceptance, compared to only 40% of shippers.
Download the full KPI research study to get more insights.
3. Carriers and shippers are in a constant state of conflict on service expectations.
Don’t believe the naysayers.
Though you can characterize the U.S. truckload market as an constant ebb and flow between carrier supply and shipper demand, that doesn’t mean they’re on totally different pages.
Across all the core supply chain KPIs (on-time performance, service expectations, payment terms, etc.), carriers and shippers were closely aligned.
In fact, 74% of carriers and 78% of shippers agree that there should be set industry KPI standards.
4. Your carriers think scorecards are a waste of time.
Way off. When asked if they found carrier scorecards from customers as useful tools for improving performance, only 7% of carriers disagreed.
A vast majority of carriers think scorecards are beneficial to giving better service.
SUPPLY CHAIN STRATEGY MYTHS
5. On-time means on-time.
Not necessarily.
While punctuality is important, both carriers expect a little lenience — and most shippers give it. 32% of shippers only measure on-time to the day.
Of the other 68% that measure on-time to an appointment, 83% of those shippers still give at least a 15-minute buffer, and nearly half give 30 minutes or more.
6. Blown freight budgets during pandemic-era volatility means shippers are primarily focused on cutting costs.
Wrong.
When asked if they pursued a cost or performance-oriented supply chain strategy, 77% of shippers are doubling down on resiliency first.
Every year, supply chain becomes a more integral part of overall corporate strategy and competitive advantage, not just a simple cost center.
Download the full KPI research study to get more insights.
7. Having a high-performing supply chain means treating all customers the same.
Wrong. If you want to manage rising demands, you need to be strategic — 69% of shipper tier their customers and adjust their KPI standards accordingly.
This gives you more ability to use budget carriers and high-service carriers at the right time.
KPI MANAGEMENT MYTHS
8. We’re so far behind our competition in our ability to track and use data.
Don’t be too hard on yourself — you’re probably doing just fine.
Only 32% of shippers reference their supply chain KPIs daily.
60% of shippers think they’re just OK at tracking their supply chain metrics, and 64% think they’re just OK at actually taking action on the metrics they have.
While few are complete novices, most businesses are intermediate with their current level of logistics KPI sophistication.
Download the full KPI research study to get more insights.
9. Sustainability KPIs are not that important.
Incorrect. 95% of shippers are currently tracking sustainability KPIs.
They are also looking for help, with 17% of businesses outsourcing that function to a 3rd party vendor.
10. Actually using supply chain data to drive change is the toughest part of KPIs.
Wrong. Getting accurate data and getting consistent data were actually the top two supply chain KPI challenges.
While it was still a top challenge for 41% of shippers, data integrity appears to be the biggest thorn in shippers’ sides.
11. The supply chain department manages supply chain KPIs (obviously).
Not always.
The most common way that shippers manage their supply chain KPI management is actually using a dedicated data team centrally monitoring all company KPIs, followed by relying on freight providers.
Leaving KPIs to the supply chain team was the 3rd most preferred option.
12. With so much readily available technology, we’ve achieved end-to-end supply chain visibility.
Not quite. Despite the ubiquitous smart phones, 5G networks, internet of thing (IoT), RFID tracking, and electronic logging devices (ELDs), as an industry we’re still a ways off from true end-to-end transparency.
When asked how confident they were in the accuracy of their shipment tracking data, only 27% of shippers and carriers were very confident.
In fact, getting accurate data was shipper’s #1 overall supply chain KPI challenge.
Download the full KPI research study to get more insights.
13. Everybody is using a tech tool to manage their KPIs.
False.
While warehouse management systems (WMS), transportation management systems (TMS) and enterprise resource planning platforms (ERP) all play a role in KPI management, the most commonly used tool was the good ol’ fashioned Excel sheet.
66% of shippers are using manual methods (emails, Excel, shared docs) to manage at least some portion of their supply chain metrics.
INDUSTRY VERTICAL MYTHS
14. Driven ecommerce demands, retailers have the highest delivery performance expectations.
Not quite. When it comes to on-time delivery performance, retailers were actually one of the more lenient industry verticals.
Retailers were the most likely to accept on-time delivery performance of 90% or less, which as twice as much as the leading vertical.
They were also the second most-likely to give their carriers an appointment buffer.
15. With Just-In-Time manufacturing, the auto industry only trusts asset-based providers to stave off assembly line shutdowns.
Incorrect. Only 27% of automotive shippers work exclusively with asset-based carriers, the other 73% work 3PLs into the mix, trusting them with their critical freight.
The most asset-carrier intensive industry? Food & beverage, with 56% of companies opting for asset-only solutions.
You’ve Busted the Myths. Get the Benchmarks.
When setting your supply chain strategy, knowledge is power.
The more you know about how your network, your providers and the industry operate, the better you can prepare.
Download the full research study to get more insights, including industry benchmarks for the core supply chain KPIs.