The Role of Performance Indicators in Distribution Logistics

Distribution logistics is a fundamental part of company operations and for stocking inventories. The efficient flow of goods between distribution centers (DCs) and physical stores is crucial to ensuring that stock is available at the right time. Maintaining good Yard Management guarantees not only an efficient distribution flow but also prevents stockouts and, indirectly, positively affects the customer experience. In this context, performance indicators are essential to measure the efficiency of distribution logistics and ensure operational productivity.

But are you familiar with the main performance indicators in distribution logistics and how they can impact your business? Check out the key logistics KPIs in this article and how they will make your Yard Management more transparent, efficient, and profitable.

Distribution Logistics and the Business Impact The market, especially retail, relies on agile and efficient distribution logistics to ensure stores are properly stocked, particularly during times of high demand. When it comes to retail chains, there is also the challenge of receiving orders at distribution centers and passing them on to stores, so that the latter are always properly stocked.

Without distribution precision, stockouts, delays, and crowded yards are common consequences for businesses. As a result, sales are lost, time is wasted, and logistics costs are higher. For the supermarket sector, for example, which, according to a survey by XP Investimentos, had a revenue of R$611.2 billion in 2022, a lack of distribution control significantly affects profit.

KPIs are essential for managing this operation effectively. See the indicators you can include in your operation:

On-Time Delivery (OTD): This indicator measures the percentage of deliveries completed within the agreed timeframe. It is fundamental for ensuring shelf replenishment, as delays can result in empty shelves and lost sales.

Stockout Rate: The stockout, that is, when an item is unavailable for sale, is one of the biggest problems in retail. Monitoring the stockout rate between DCs and stores allows for the identification of planning and supply failures. This KPI also measures distribution efficiency and aids in replenishment optimization.

Logistics Lead Time: Refers to the total time spent from the moment the order leaves the distribution center until it arrives at the store. The shorter the lead time, the more efficient the logistics operation. Reducing this time contributes to greater flexibility, especially in environments with high demand variability.

Yard Time: Another indicator worth measuring for logistics efficiency is the vehicle's yard time. The longer it is stationary waiting for unloading, the more inefficient the scheduling process is. This is because efficient scheduling that provides operational visibility guarantees a continuous flow, preventing queues or delays in receiving orders.

Dock Occupancy Rate: Docks are strategic areas in the loading and unloading process. Monitoring the dock occupancy rate helps to understand whether they are being used efficiently or if there are periods of underutilization or excess demand.

The Importance of Delivery Scheduling in Yard Management A crucial point in distribution logistics, especially between DCs and stores, or between supplier and store, is delivery scheduling. Yard Management, which involves organizing the schedule and flow of trucks, and controlling the arrival, parking, loading, and unloading of vehicles, can be a challenge when there is no efficient organization.

Automated delivery scheduling allows for a more organized management of truck flow, preventing congestion and increasing productivity. This is because, in addition to having all management in a single environment with an integrated schedule, automated management streamlines processes, such as the advance checking of the invoice.

Furthermore, those who automate Yard Management with Tempo Certo can extract complete reports to monitor indicators and identify bottlenecks. Thus, with efficient data and operational visibility, they can act proactively in the continuous improvement of logistics, eliminating bottlenecks or delays.

The Muffato Group, for example, increased its daily order receiving capacity by 50% by organizing its Yard Management with Tempo Certo. The indicators monitored through the data collected on our platform point to improvement opportunities, leading to a much more efficient management.

Therefore, delivery scheduling, combined with the monitoring of the correct KPIs, is decisive for efficient Yard Management and for ensuring that the flow of goods occurs without interruptions. Companies that use these indicators to guide their decisions are better prepared to face logistics challenges, maximizing efficiency and better serving their customers.