Understanding what the Foreign Trade Performance Indicators are is essential to reduce costs, operating time and service quality. And the market is increasingly looking for Comex professionals who master KPIs (Keys Performances Indicators) knowledge.
We have separated 7 performance indicators in foreign trade that need to be part of the routine of those working in the sector.
Shipping Time performance refers to the proportion of orders that were sent on or before the requested shipping date divided by the total number of orders.
This is the first logistics KPI to help you measure your supply chain performance.
In fact, if the time period between the time the client placed his order and the time the order is ready to be shipped is too long, this may present some problems in the process that need to be fixed.
Whether it's outdated planning processes or disconnected execution systems that are too slow to cope with growing demand, problems need to be solved to respond quickly to unexpected events.
After performing a benchmark of the average time required to send a certain type of order, you can set a target shipping time for each product to be achieved.
The perfect order rate is another highly important logistics metric. It measures how many orders are processed, shipped and delivered without any incidents on the way. A process with 100% accuracy succeeds:
This metric is important because it shows the efficiency of your supply chain and delivery services, and it leads, of course, to happier customers who are willing to return or recommend your services.
The higher that rate, the better for your business. You'll lose less money on inaccurate or damaged goods returns and increase the satisfaction level of your customer base.
The average transportation costs calculate a total of the expenses involved in processing a purchase order from start to finish.
It will divide all costs related to this logistics KPI according to different categories:
After calculating these points, you can evaluate the percentage that each step of the process represents and see if this is excessive or within the norms.
You can also calculate the transportation costs for a product and see how much an item costs compared to how much revenue it brings you.
The goal is to lower transportation costs while maintaining high delivery quality.
Stock accuracy is one of those logistics metrics that can guarantee great success or break your warehouse.
In fact, having a certain record of all your goods in your database that does not correspond to the actual physical inventory can harm your business as a whole.
If your stock is inaccurate, this can lead to unexpected backorders, but also to dissatisfied customers and generally higher overall costs.
A regular inventory check of existing discrepancies with your electronic inventory record ensures that accounting practices are in order and that your business is reliable, avoiding phantom inventory nightmares.
This proportion will also help you identify problems related to receiving, sending or accounting.
It is normal to have some disparities between registration and storage, but the idea is to keep this proportion above 92% as much as possible.
The period from the inclusion of the sales order in the system until the moment of delivery to the customer is what we call the Lead time of the order.
Such an indicator helps to identify steps that cause delays and other bottlenecks that may compromise the efficiency of processes and increase the risk of delays.
More complete and accurate than the evaluation of only the transit time of the carrier, the monitoring of this logistic KPI points to delays not necessarily linked to the transport activity - which must therefore be dealt with internally.
By identifying Lead Time, you'll have the data at hand to understand where you need to focus on improving processes. Example: if there is a delay in including the sales order in the system, you can define with the responsible sector the improvements that need to be made to decrease that time - and the best, with data showing that's the problem there.
Already on that KPI, we measured the time your cargo is in transit.
Transit Time or cargo transit time is focused on measuring and analyzing the time it takes for your shipment.
For this, it is essential to make a comparison between what the logistics provider has presented in advance with what is actually being done.
This way, you confirm if the cargo is being shipped in the agreed time or know where the bottlenecks are occurring.
This indicator allows the operation to be measured from the consumer's point of view, something that many people normally find difficult to monitor. Precisely because of this, it is also one of the main indicators of logistics performance and one of the most indispensable for supply chain management.
This KPI measures the effectiveness of the deadlines met (on time) and the efficiency of other service processes (in full), which means that delivery was completed according to consumer expectations.
To analyze OTIF correctly, some important factors are indicated below. These are:
One way of calculating OTIF is from the following equation: OTIF (%) = number of OTIF deliveries / total number of deliveries X 100.