Measure Absolutely

The economic downturn we are experiencing will no doubt result in some consolidation in the Logistics Service Provider (LSP) industry. For clients who are planning to change providers this is a good time to establish service standards that are relevant to their operations. For example, on time service standards are basic and common to all LSPs .

Most logistics service providers present clients with monthly reports touting their on time delivery percentage. It is easy to become complacent when LSPs routinely report 97-99% on time service after taking exceptions for weather and other factors.

Why not challenge them to measure absolute performance failures instead of percentages? In a high volume operation even a small percentage can mean a lot of late shipments and unhappy customers. In a smaller operation with fewer customers every shipment is critical. If LSPs can track and report percentages they should be able to do the same for absolute numbers of shipments. FedEx has measured absolute performance for years.

Finally, if you are an LSP, remember that you have a client on both ends of the shipment, so service failures have twice the impact. Different metrics are like fresh eyes on an operation.

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