Logistics KPIs and the importance of analyzing them

Cerrar la mano del hombre de negocios ocupado en el escritorio de oficina en el cuaderno y documentos de trabajo - KPIs de logística foto

In many professional fields, especially in business, it is of utmost importance to collect data and organize it into performance measures, better known as KPIs. Because you can analyze performance with numbers, either a quantitative or qualitative value, you have clearer information about the progress of your objectives.

It is very important to establish logistics KPIs because they have one of the highest costs along with manufacturing and marketing expenses. This would result in huge losses if they are not properly monitored. This is when we ask ourselves, what are the essential KPIs to accurately measure your logistics objectives?

If you want to learn more about the different areas of logistics where the logistics KPIs cannot be missing in the dashboard, take a look!

Storage

It should be noted that warehousing should not be confused with inventory or stock because these indicators do not indicate the stock itself. KPIs are about analyzing the internal processes that take place in warehouses, such as picking and order preparation.

An example of logistics KPIs used in warehousing is the unit cost of warehousing which calculates their respective expenses. Apart from that, to analyze warehouse performance and productivity there are the KPIs of on-time complete delivery rate and internal cycle time that serve to calculate the time elapsed between the order request and the dispatch of the order itself.

Inventory

This is, of course, one of the most important sections of logistics because it deals with the products themselves and the stock that circulates through the supply chain. In addition to the fact that classifying and sorting the different types of stock is paramount to its proper functioning, so is assigning objectives and their respective logistics KPIs.

For that, the KPIs to be commonly taken into account are the following: Stock Breakage to analyze how many times the inventory has been emptied and what can be improved, Stock Turnover to estimate how many times the inventory needs to be renewed and, of course, inventory costs. It is worth mentioning that a high Inventory Turnover means that profits are being made on sales.

Ilustración de concepto abstracto de kpi - KPIs de logística vector

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How has AI been successfully applied in the supply chain?

examples of artificial intelligence in vector logistics

Artificial Intelligence is known to be a growing trend in many industries around the world. And it is no mystery when logistics and transportation are looking for ways to apply such technology for the improvement of all their operations within the supply chain. From back office solutions to IoT control solutions, there are several examples of artificial intelligence in logistics.

However, for people who are not deeply involved in the industry, it is not very clear to them what specific operations AI is involved in. What are the current supply chain issues for the supply chain to be optimized with AI? And what advantages does this technology confer over the competition?

If you want to learn how AI is being applied in supply chain management with these examples of artificial intelligence in logistics, take a look!

Warehouse automation

Sectors such as e-commerce have gained much relevance in recent years, so the increase in demand and the need for a more efficient storage management call for a solution. For this reason, there has been a notable trend in warehouse automation as one of the notable examples of artificial intelligence in logistics.

Warehouse automation encompasses various operations, from the application of automated storage systems with stacker cranes to warehouse management software. Within it, they use data analysis and demand forecasting to coordinate various processes in the warehouse.

And not only do they perform this step, but they synchronize the tasks of both the operators and the automated systems. In this way, personnel can focus on other tasks.

Inventory control

This operation usually goes hand in hand with warehouse automation and, it seems, is going to be an essential element for companies. Currently, it is known that the volume of shipments is dropping considerably due to inflation, as a result of which stock is accumulating and will take longer than desired to accumulate in the warehouse.

First, the warehouse is stocked with the right amount of inventory according to demand prediction based on previous sales, market analysis, among others. Then, automation systems would be unified with catalog control to improve stock visibility by alerting on low stock levels and detecting defective products and packaging before they are shipped via AI cameras or sensors.

Thanks to one of the examples of artificial intelligence in logistics, it is possible to reduce error margins and time spent on tasks, obtaining high customer satisfaction and competitive advantage over other companies where logistics plays a crucial role.

Primer plano de un ordenador portátil que ejecuta un algoritmo que analiza el código en el escritorio frente a los programadores que trabajan en equipo - ejemplos de inteligencia artificial en la logística foto

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Which route will get you to your customer first?

Tiro medio hombre hablando por teléfono. cómo llegar antes a tu cliente foto

One of the most important and, at the same time, tedious tasks to perform in a company with logistics and transportation is the calculation and planning of routes for a specific day or week. With the increasing number of challenges in the industry such as low-emission zones, high fuel prices and higher demands for satisfactory customer service, it is necessary to re-manage routes to adapt and become more efficient.

Para encontrar la ruta definitiva que hará llegar antes a tus clientes se deben de tener en cuenta varias características de las paradas, vehículos y restricciones, entre otras. Además de mantener una comunicación sólida ante cualquier incidente que pueda ocurrir, ya sea un factor interno o externo.

If you want to know the key factors for optimizing delivery routes and how to reach your customer faster, take a look!

Distances between delivery points

Entre los principales factores que se piensan primero cuando se habla de optimizar rutas de reparto son las distancias entre el centro logístico y los puntos de entrega. Además de que es más sencillo calcular una ruta concreta en cuanto echamos un vistazo a la proximidad entre varios puntos de entrega.

Generally, if other factors and constraints are not taken into account, one of the best routes is the one that starts with the stop closest to the warehouse. And then follows the second stop close to the first, and so on until you have finished with all orders and return to the logistics center.

However, a simple glance at delivery points can hide narrow and difficult to navigate last-mile streets that can significantly delay deliveries. Consequently, this factor is one of the first to be considered when creating a "sketch" route and then assigning drivers, vehicles and other constraints.

Delivery and staffing schedules

It is known that, with a number of batches or individual orders for a specific day, a delivery time zone is agreed with the users when calculating routes. However, these customers are increasingly requesting more precise time zones, according to their needs. Therefore, such orders must be assigned to the carrier with shifts and agreements that are compatible with the assigned time slot.

It should be noted that special attention must be paid to labor restrictions for carriers. For example, drivers are not allowed to work more than 6 hours at a time without a break in a day, so they must rest for a minimum of 30 minutes. If it is a very long route, the appropriate time slot would be assigned in accordance with the regulations and, if necessary, another carrier would be assigned to cover the shift. Not to be forgotten are the hours when loading and unloading is allowed in the cities or at the logistics center receiving the delivery.

Punto de entrega concepto abstracto ilustración vectorial. cómo llegar antes a tu cliente vector

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Hedyla en el e-Show de 2022

stand de Hedyla e-Show 2022

La semana pasada parte del equipo de Hedyla ha estado presente una vez más en el e-Show de 2022 que tuvo lugar en la Fira de Barcelona, en particular en el recinto de Montjuic. Este año se ha notado más afluencia que el año pasado gracias a la relajación de las restricciones de la pandemia. … Read more

4 Logistical decisions to be made by Artificial Intelligence

Ilustración del concepto de cara de robot. decisiones logísticas que tomará la inteligencia artificial vector

Whether in the digitization of processes or digital transformation, artificial intelligence is increasingly present among companies in any sector. But logistics stands out, as companies today seek to streamline their digital operations and/or change their strategy to meet current industry demands, looking for the best logistics decisions that Artificial Intelligence will make.

There are currently many options and tools with AI on the market that, rather than offering a magic solution to all problems, help in the management of the most complicated processes and assist in making decisions in the face of difficult challenges to solve. Some of them have already been heard a lot about due to their recent use in large companies, but others are not so well known.

The following are the types of logistics decisions that Artificial Intelligence will make in both operations and strategy.

Demand forecasting

It is no mystery to know the most popular peak demand times such as Christmas or Black Friday, when most industries are affected. However, each sector and, in particular, each company knows its own order increases in more or less detail depending on the times and data from previous years, among other aspects.

Despite this, the optimal number of stock is not always right in order not to suffer losses due to excess or broken stock due to its incredible complexity determined by both external and internal factors. That is where AI comes in to plan demand based on algorithms that calculate previous years, marketing campaigns and even taking into account some external circumstances such as changes in laws.

Reverse logistics costs

Reverse logistics is known to be one of the biggest challenges for a company running a supply chain. This is because the cost of a return is much higher than that of a shipment because it is not only a matter of bringing the product back to the warehouse. It is not only a matter of bringing the product back to the warehouse, but also a rigorous administrative management to reintroduce it to the active stock, repair it if necessary, or destroy it if the previous steps cannot be applied.

At this point is when Artificial Intelligence comes in to make decisions based on several criteria, but whose main objective is to assess whether to process the return of the order or not. To do this, the AI takes into account such obvious factors as the cost of the refund, but also other not so obvious ones such as the condition of the product to consider its resale and even the buyer's history to analyze his behavior with the brand.

Once these facts have been analyzed, the AI can make two decisions: either not to process the return, but to pay the customer if the costs are not profitable, or to process it when the losses are not so serious for the company's economy. Not forgetting that the dissatisfied consumer is also analyzed in terms of his brand loyalty and whether he will be penalized for processing too many returns.

Hombre usando un asistente digital en su tableta. decisiones logísticas que tomará la inteligencia artificial

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3 logistics solutions for the wine sector

Manos de personas recibiendo una botella de vino tinto. soluciones logisticas para el sector vitivinícola foto

Two years after the beginning of the pandemic, we can confirm that the wine sector is gradually recovering. That is because its consumption is growing to pre-pandemic levels after the presence of really important stock problems derived from the lack of sales and reduction of production due to the pandemic.

On the other hand, we should not overlook the current threats to post-pandemic recovery that also affect the other sectors. From the increase in the price of supplies and their shortage to the political and economic tension caused by the invasion of Ukraine, which have left a difficult panorama for the restoration.

One solution for logistics in the wine sector to cope with the growing demand and cost savings has been digitization and with it, the use of digital tools to improve internal processes. In this case, the planning of e-commerce and in-store distribution routes and the tracking of deliveries through a mobile application have improved the quality of service. The customer is the most important thing and a mistake in delivery can be catastrophic for their confidence and satisfaction.

But let's go a step further and discover the ways in which logistics solutions for the wine industry can help in the supply chain. Here are some of them:

Transportation Management

An essential part of logistics in the wine sector is transportation. We are talking about a product that is sensitive not only to sudden temperature changes but also to the duration of the journey. To this must be added the weight of glass, which in some cases can exceed the maximum authorized weight and the consequent penalty that this entails.

With a transport management system we will be able to optimize not only the specific loads needed but also the routes. All this taking into account the necessary conditions to load wines safely without losing quality. This is undoubtedly one of the most important logistics solutions for the wine industry.

Traceability

Another problem faced by logistics in the wine sector is fraud caused by the lack of traceability of the origin of the products. To validate the quality of the wine, especially if it is a high-priced product distributed in bulk, it is very important to have the location of the components in hand. In this way, apart from fraud, we can avoid excessive costs for the recall of products in the market that are out of our control.

Among the logistics solutions for the wine sector, it is important to implement a warehouse management system or WMS, which has a good identification and coding system. That is because its correct labeling can unequivocally guarantee the origin of the products, particularly if they are high quality wines. Besides that a blockchain system is perfect in traceability. That is because such processes become more transparent for the consumer and more secure for producers thanks to its encrypted blockchain system.

Ilustración isométrica de la fabricación de vino. soluciones logísticas para el sector vitivinícola vector. soluciones logísticas para el sector vitivinícola

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5 aspects to promote Competitive Sustainability

Camiones eléctricos concepto abstracto ilustración vectorial. sostenibilidad-competitiva-1

Many companies in all types of sectors are already committing to more sustainable actions in their activities. However, it is not enough to want to be more environmentally friendly; we must also strive for competitive sustainability. In other words, actions and initiatives must be sufficiently competent and attractive for companies to start applying them.

This issue is very relevant for the logistics and transportation sector due to its relatively high environmental impact and the increase of vehicle restrictions in cities. Here are some competitive sustainability initiatives to make a difference:

Urban warehouses

If transportation costs are higher, the longer the distance to be traveled, the greater the outlay the company will have to make. One of the most effective solutions to this problem is urban warehousing. What is different from a conventional warehouse is that urban warehouses are located in or around large cities in order to be close to demand.

Notably, they have been a growing trend in the e-commerce sector and in any industry that requires last-mile delivery. While it is true that reducing distance reduces emissions, the supply chain would not be efficient if warehouse operations are not efficient either. Therefore, a picking optimizer can help streamline your urban warehouse.

Unify shipments

Tal y como se mencionó en el webinar de movilidad sostenible, no es ecológico comprar de 4 e-commerces distintos y que el envío lo efectúen 3 empresas de transporte diferentes para que lleguen a tu dirección a una hora similar. Por lo tanto, algunas empresas, sobre todo las grandes, han considerado otorgar la posibilidad de unificar los envíos.

That means that several shipping companies would have to agree on who does the shipping or give the consumer the option to choose the company itself. Such actions are currently very difficult for SMEs to carry out, unlike large companies such as Amazon, which already provide this possibility of applying competitive sustainability.

sostenibilidad competitiva 2

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Keys to understand the rise in fuel prices

conductor-de-camión-sentado-en-su-cabina-de-camión-sintiéndose-preocupado-y-molesto-subida-del-precio-del-combustible

La gran subida del precio del combustible es un hecho, ya que está presente en nuestro día a día, además de preocupante. La mayoría de las personas están comentando por su gran impacto tanto a particulares como a empresas. Pero, ¿cuáles son las causas principales que nos ha llevado a este punto? ¿Qué consecuencias va … Read more

7 benefits of a TMS that will help your business

Ilustración de vector de concepto abstracto de gestión de cadena de suministro - beneficios del tms

You've probably already heard about why it's so important for your company to implement transportation management software because of all the benefits a TMS provides. Thanks to the growth that the TMS industry has experienced, there are now more affordable options for small and medium sized companies along with that of large enterprises.

However, it may seem complicated to install a TMS and that it will take time to understand its interface and manage it. But the opposite is true: it saves time and money in your logistics operations.

If you want to know in detail the benefits of a TMS, take a look at the following tips:

Unify all data in one place

Imagine a TMS as a control tower that also unifies all types of data on a single platform, from the manufacturer to the last mile. In this way, you can visualize it from a single platform and always keep the information up to date.

Thanks to this unification, managers and staff can make changes easily and with all the updated information. From route adjustments to implementing new processes, this is one of the key benefits of a TMS for your company.

Increases warehouse efficiency

Being up to date on the life cycle of orders throughout the supply chain gives a clear view of future needs and anticipates when inventory needs to be replenished.

Having full control over the loads entering and leaving the warehouse helps to better calculate the amount of stock needed to meet demand without delays and also to avoid stock-outs.

Let's not forget either that all the time saved on more automated tasks can be invested in this very important aspect of the entire logistics process.

Save transportation costs

It is known that one of the most costly activities in the entire logistics process is transportation, due to the fact of handling fuel, distances traveled, personnel, among others. It is estimated that it accounts for more than 50% of the total logistic cost of all companies.

However, one of the benefits of a TMS is that it assists in the planning of all loads so that each trip is worthwhile and no more money is wasted than could be saved. In addition, if we optimize our routes for those loads, we will be able to reduce further costs.

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5 solutions for carriers to make their job easier

Ilustración de concepto abstracto de centro logístico vector gratuito - soluciones para transportistas

One of the most critical moments in logistics is the transport of goods in which we try to operate with the least possible inconveniences to achieve the objectives successfully. Also carriers are a key part of this process with many setbacks, therefore, it is important to find solutions for carriers.

The most common problems drivers encounter are often beyond their control and their main causes are overwork and lack of proper management. If you want to know the keys to help carriers in their delivery and driving management, take note!

Optimize routes

Carriers often work against the clock to get deliveries to loading and unloading centers on time, especially those over long distances. It usually takes a lot of work to organize all the destination points to save time. In addition, both freight managers and carriers have strict work schedules and limits on their vehicles, making organization even more difficult.

Therefore, a route optimizer plays an important role in finding the most efficient route possible taking into account the various constraints and characteristics of the load, the vehicle and the driver himself. That is why it is one of the most useful solutions for carriers.

Communicate in real time

On the road and in cities, many types of mishaps can occur despite a well-defined route and optimized loading. All this work would be in vain if good real-time communication is not maintained.

Thanks to the digitization of the industry, more carrier solutions have been developed that keep staff in touch and can instantly send messages about the status of the delivery. From supply chain delays to traffic restrictions and outages, everyone involved in the process must be informed of any unforeseen events and create strategies to avoid them as much as possible.

Upgrade vehicles

Given the increasing restrictions in cities and on highways regarding the circulation of a certain number and type of vehicles, it is time to consider such solutions for carriers as alternatives that meet the requirements of the environmental label.

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What are the trends in logistics for 2022?

tendencias en la logística para el 2022

In a world that is changing more and more rapidly, it is essential to be aware of new technologies, methodologies or changes that are occurring in the field, especially if they come from a gradually more demanding sector such as logistics. To this end, companies directly or indirectly related to the industry are attentive to the trends in logistics for 2022.

It is known that the pandemic has greatly affected the logistics sector, either because of the problems with transport vehicles or because of the constant growth of e-commerce due to mobility restrictions and confinement. Here are the most important trends in logistics for 2022:

Green or sustainable logistics

One of the biggest concerns in recent years is the great environmental impact that logistics has on CO₂ emissions, as they account for 27% of total emissions in Spain (MITECO, 2020).

To this end, they have mobilized to use technological tools to help them reduce carbon dioxide emissions and more environmentally friendly materials such as the following:

More and more companies are looking to the future and opting for tools that help them to be more sustainable and reduce emissions that harm the planet.

Blockchain

Along with the high demands on delivery times, it is also very important to maintain the security of logistical data. Blockchain, or block data, is used to keep all the numbers in one place.

Apart from that, the blockchain makes sure to keep a real-time tracking of all logistic operations in order to plan processes in warehouses and vehicles.

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How Santa carries out his logistics for Christmas

Retrato de hombre en Traje de Santa Claus - logística para Navidad

It is one of the most important times of the year and Santa Claus along with the heads of each department's help prepare well in advance their logistics for Christmas so that all the gifts arrive on time to their homes.

Looking at how demand has grown in recent years, it is no longer enough to manufacture and distribute toys with his sleigh alone. The logistical processes have become increasingly complex and demanding, so Santa Claus has an army of elves and reindeer ready to facilitate such complex logistics management for Christmas.

From raw materials

When Santa Claus has an idea in mind for a new toy, he works with the development department to get the product into production. He makes sure that the elves get the raw materials they need for manufacturing thanks to his good relationships with suppliers.

To fullfill this, the materials travel through a complicated network of logistics from the time they are mined for processing in a factory and so on until they reach the hands of the elves, who make the final product. In addition, their magical staff has a warehouse for all those goods used for the manufacture of toys.

Inventory storage

From raw materials to toys ready to be shipped, all this inventory must be stored in their respective warehouses. There all the items are packed, sorted and well ordered so that they can be easily located in a warehouse as big as Santa's.

Thanks to the latest technological advances, Santa Claus has not hesitated to automate the ordering systems and to optimize the stock databases in order to have total control over the inventory and avoid stock-outs.

Warehouse operating processes

When one of the thousands of warehouses Santa Claus has all over the world orders a certain amount of toys, the elves in charge of the warehouse get down to work. First they check the available stock, locate the order and pack it carefully so that the products are not damaged in transport. For this purpose, a picking optimizer is very helpful in locating inventory quickly.

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Do you want to know how to reduce costs in fleet management?

Reduce costs in fleet management - Image created by vectorjuice - www.freepik.es

Objective: to reduce costs in vehicle fleet management. This is the goal pursued by every logistics manager who wants to position his business as a leader in the sector. Although it is a complex task to carry out, in this article we are going to give you some keys to achieve it.

First of all we should know the causes of these high costs and how with digital technologies we are going to solve them.

  1. High fuel costs. Minimizing fuel consumption is a priority in fleet management, since it is estimated that 20% of the total cost of the fleet comes from fuel consumption.
  2. Vehicle maintenance. A correct maintenance of the fleet is a must for every company. To carry out the periodic revisions, to adopt security systems for the vehicles or to control and to solve any problem observed by a driver would be a good practice for any company, but unfortunately the lack of control in this area derives in an increase of costs of the management of fleets.
  3. Reckless driving and/or accidents. Reckless driving increases the probability of an accident and also the maintenance costs of vehicles, which suffer greater wear and tear.
  4. Costs that are unpredictable or difficult to control. Costs such as fines to drivers or fines for not having passed different vehicle inspections, even fines from insurance companies for irresponsibility on the part of carriers. Time lost in traffic jams or due to drivers' medical leave or time spent on vehicle inspections are just a few examples of costs that directly affect a company's fleet management.

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What software is used in logistics?

What software is used in logistics?

Logistics software are all those digital solutions that allow you to manage, control and optimize the different logistics processes from both a strategic and daily operational point of view. In order to be prepared for today's needs, it is important to know what software is used in logistics nowadays.

Logistics is complex as it integrates a multitude of activities with many actors involved. Likewise, logistics has a great connection with the rest of the company's activities and, therefore, is affected to a great extent by decisions and situations derived from other factors that are not properly logistical, such as sudden changes in demand, new products launch or expansion to new territories, among many other examples.

The digitization is currently a key aspect for the future of companies of all sizes. However, the complexity of logistics mentioned above is also visible in the variety of types of software for logistics, or that have a direct relationship with it, for example systems for supply chain management or company management (ERP).

Logistics software

In addition, each type of software also has notable differences from others that are in exactly the same category. Therefore, it is necessary to go beyond the category and see the functionalities that each system offers to know exactly whether or not it adjusts to the needs of each company.

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Balancing cost and quality of service in last mile distribution

Cost vs Quality of Service Balance in Distribution

La distribución de última milla tiene un objetivo muy simple: mover bienes desde un almacén o hub hasta su destino final. Pero, de ser tan simple, no serían necesarios ni expertos en logística ni ningún software de optimización. Los factores más relevantes a la hora de planificar la distribución son las restricciones y el entorno, la calidad … Read more