In the last two articles the focal point of interest lay in the importance of the transport system to optimize costs and the dimensioning of that system. Consequently, we now focus on the indispensability of the transparency. Once a system has been selected, it must be managed transparently in order to be used sensibly and to increase its value.
In order to be able to assess and control the cost situation as well as the performance in transport logistics well and to implement the right optimisation measures, a solid basis with figures, data and facts is required.
Usually you will find key figures for transportation such as pro rata costs in relation to sales or costs per tonne, which are particularly important components at management level.
Further details and developments of the so-called input control variables are necessary in the areas of active control. These key figures are a good starting point for the analysis of the transport situation, the monitoring of change measures and the monitoring during operation.
Visualisations are the key to understanding
Dashboards help to provide an overview, so that developments and trends can be recorded in a few moments and deviations can be noticed. The information is based on cost drivers and factors critical to success. Ultimately, this level of transparency provides a solid basis for decision-making, for example, in order to be able to actively and specifically influence the proportion of transport costs to sales.
Clearly, the relevant input control variables in transport are completely different for the own vehicle fleet than for the use of service providers.
When awarding transport to service providers, the basis is a complete recording and presentation of all services that are provided. This is especially necessary for the comparison of costs to services, for invoice control or a credit note system. In addition, this information, together with the allocation of costs, is needed for regular tenders, which are also part of good transport management.
In the case of a company’s own vehicle fleet, it is important on the one hand to make measurements transparent that allow a comparison with the services of forwarding companies and on the other hand to keep an eye on the performance of the company’s own services.
In a reporting system, it is therefore important to keep an eye on different dimensions and key figures. A selection of these can be found here:
- Quantities & frequency of use: The development of the transported quantities for different assortments, in addition to their frequency of use, can give a first impression of the utilisation of the company’s own vehicle fleet. In addition, a continuously high proportion of volumes transported by external service providers for individual sub-ranges with a low frequency of use in the own vehicle fleet is often an indication of incorrect dimensioning/specialisation of the own fleet.
- Performance: The observation of trends and developments in services provided per calendar week (e.g. average tons per operating day, average KM per operating day, average operating times per operating day) offers the possibility to recognize changes at an early stage and to take countermeasures if necessary.
- Purchased services: Particular attention should be paid to this dimension, as it should reflect the basic strategy with regard to the own fleet / external fleet. Do I continuously buy a certain number of articulated vehicles although my own vehicles are not fully utilized? How many chauffeurs do I buy in on the respective weekday to cover peaks?
- Quality: This dimension offers the possibility to present problems transparently, which could not be “solved” in daily work. Possible key figures are, for example, “orders not fulfilled”, “tons not transported”, “number of complaints”.
One step further is the use of key figures that allow commercial aspects to be directly incorporated into reporting. Average costs per tonne or the contribution margin per stop for certain target regions also offer the possibility to set commercial measures such as minimum quantity surcharges for certain target regions.
Increased transparency reveals sources of error or opportunities for optimization, which should then be transformed into management routines for action and consistently followed up. The interfaces of transport logistics to adjacent internal or external service partners pose many challenges. Problems often arise during loading if materials are not picked or internal deadlines are not met. Similar problems also occur in downstream process steps when there are special requirements for unloading or services are provided by external partners. These challenges in upstream and downstream process steps will be dealt with in the next article.