Slow service. Menu items that aren’t available. Someone else’s order on your plate.
If you think back on some of the worst restaurant experiences you’ve had, there are probably several common factors. You might consider any (or all) of these issues when choosing the next place to go out for dinner—but we’re betting you won’t go back to a spot that disappoints.
But how exactly did the restaurant fail you—and are these factors somehow related? Is it possible that simple logistical changes could turn things around? For example: Could analysis of menu and inventory yield a better product on the plate, or would point-of-sale improvements help to guarantee order accuracy?
In business, as in food service, the customer is everything. Even for the greatest products, problems with shipping, inventory, and total cost can create a negative client experience that impacts brand perception, scares off repeat business, and ultimately damages the bottom line. So how does a successful business ensure their customers keep coming back for more?
In a previous post, we examined how businesses end up focusing on the wrong key performance indicators (KPIs) for logistics—and how they might avoid common pitfalls in the future. Here, we’ll look at several types of “good” KPIs—measurable, impactful, and actionable metrics that can help you steer the ship in the right direction and deliver a better experience to your customers.
The Key Lies in KPIs
Restaurants often lack the concrete data needed to make improvements. But fortunately for companies that rely on shipping and freight partners, there are numerous key performance indicators (KPIs) that can help you evaluate efficiency, accuracy, and cost, then determine how they translate to your customers.
But knowing the “metrics that matter”—and then using them to your competitive advantage—takes some planning. As it happens, much of what you expect in a restaurant experience can be applied to a few of the most essential logistical KPIs.
KPIs for Timeliness & Efficiency
Perhaps the most frustrating experience at a restaurant is waiting too long for an order. Whether it takes too long to cook or too long to get from the window to the table, the end result is a frustrated diner who probably won’t return.
In the supply-chain world, on-time final delivery is among the most significant performance indicators. No matter the cause, late delivery can incur significant penalty costs and damage a client’s reputation with their end customers. Making sure that your shipping operation can reliably get the product from door to door on time, every time, is critical to a successful customer brand.
Excessively late deliveries are even worse, and you should track them, too. In fact, it’s been said that a business delivering products late more than 2 percent of the time can choose to either fail—or make a major change.
On-time shipping analysis helps create efficiencies that get your products off the shelves and on the way to customers faster, while allowing warehouse workers to quickly move on to the next order. On-time delivery indicators ensure that freight carriers are using optimal strategies to get products to their destination by the promised date.
KPIs for Accuracy
Just as there’s no excuse for the wrong order to arrive at your table when you’re paying to dine out, there’s no excuse for the wrong product to arrive at the customer’s location.
KPIs focused on order accuracy will reveal if a warehouse picking, packing, and shipping operation is trustworthy and efficient, or if it will damage relationships with clients and create unanticipated correction costs.
Here’s the key: when you seek to measure orders filled per hour, you need to know how many accurate orders your warehouse can fill. By taking a hard look at the numbers, you’ll ensure you’re not spending more time and money processing returns—and losing customers—than you are fulfilling new orders.
Now think back to that restaurant order: What’s worse than getting the wrong meal? How about when you send it back—only to discover that they’re all out of your favorite dish?
Inventory accuracy KPIs are the life of a business—and if a client isn’t able to order a product, delivery ceases to matter. That said, no company can simply stock everything in equal amounts and expect to win out.
In the restaurant, inventory inaccuracy leads directly to food spoilage and bad meals. In the supply chain, sinking capital into unnecessary inventory can sink an entire business. Utilizing KPIs to analyze order flow, frequency, and itemized profitability helps ensure the right products are in stock, and unpopular or unprofitable inventory is properly limited.
Value Delivered, Opportunities Seized
While there are many KPIs you could evaluate, the best ones all measure the value that smarter logistics adds to your business objectives, as well as the opportunities you’re missing. At MCG, we see rooting out these inefficiencies as the next big step towards growing your business and improving the bottom line.
Just as you remember which restaurant gave you the worst dinner experience, logistics KPIs help you know whether you’re delivering the right products, to the right place, at the right cost—and with the right standard of service. Because whether it’s a good burger or a package delivered on time, it’s all about client retention.
Remember, you can only use these metrics to your advantage if you have access to them. Get MCG’s tools and mechanisms on your side and start tracking the right KPIs today.