Collecting and utilizing the right data across your delivery operations is no mean feat. Delivery operations are fraught with complexity, and many managers struggle to figure out which essential last mile delivery KPIs they should track and measure. The stakes here are high: if you measure and optimize for the wrong KPIs, you risk overlooking important areas for growth, improvement, and optimization across the entire last mile.
The question is: how do you figure out what the right last mile delivery KPIs are, and what data should you collect to gain an accurate view of these KPIs?
Why Do Last Mile Delivery KPIs Matter?
Unfortunately, it's easy to find yourself tracking the wrong data across your supply chain workflows. For example, you might keep an eye on the average delivery time from the warehouse or a branch to the customers' doorsteps, but without any way of assessing how your performance in that area might scale. If you don't have a delivery dashboard that provides statistical insights into their buyer's satisfaction levels, it can be even harder to get a handle on the situation.
In cases like these, businesses are missing valuable information that can offer transformational inputs on the entire supply chain process, including efficient logistics, delivery operations, customer satisfaction, and brand impact. Unfortunately, failing to see these data points results in a big blind spot where owners and operators should be looking, and it could negatively affect their profit margins.
In a moment, we'll go over how folks in the last mile delivery business stand to benefit from tracking the correct delivery performance KPIs. But first, let's back up a step to talk about some of the fundamentals of last mile delivery.
What Is Last Mile Delivery?
Last mile delivery is the final stage of the delivery process , i.e. when the customer receives their ordered goods at their doorstep or in their homes or offices. According to last mile delivery statistics, it is the most expensive and time-consuming stage of the entire shipping process. The challenges for delivering in rural and urban areas are different: The former has to deal with long drives as delivery points are located miles apart. On the other hand, handling orders within urban locations requires short drives that are offset by the heavy traffic drivers have to navigate.
How Do I Optimize My Last Mile Delivery?
Given the costs involved in last mile deliveries, businesses are very motivated to find ways to increase their delivery efficiency.
Improving delivery efficiency is best done with the proper investments, particularly in software that tracks goods, drivers, and service units in real-time. Businesses need more visibility on the orders placed on each delivery truck, as well as the exact location of their drivers. A centralized, real-time data gathering system that's easily accessible across touch points goes a long way in optimizing last mile deliveries for organizations of all sizes.
Which Last Mile Delivery KPIs Should I Track?
Once you have a real-time visibility solution in place that centralizes all your relevant data, you can begin to identify the shipping KPI you need to track to guide you towards the right decisions for your operations. The following are the top metrics that you should be paying attention to:
KPIs for Delivery Drivers
Drivers affect a business's delivery success and revenues. As such, executives and managers should go beyond tracking their drivers' locations. In shipping logistics planning, route optimization is king. This means keeping tabs on every move of the drivers, including the time they spend loading the goods, navigating traffic, and their on-time percentages for deliveries. Tracking this information will help dispatchers determine if they are either underestimating or overestimating the time spent of drivers for each task.
Getting the numbers right on how long a driver takes for every stage of the fulfillment process is like hitting two birds with one stone. Managers find out about the individual performance of the drivers as well as get valuable insights into the quality of their delivery efficiencies—or lack thereof— on a broader scale.
Managers can make changes or retrain drivers based on the metrics derived from the telematics data. For example, drivers could undergo coaching if they were found spending more time on site than expected due to inefficient loading and unloading methods.
Having KPIs for drivers will allow for better planning of routes and, when held accountable, can drastically improve their delivery times.
KPIs for Shipping and Receiving
Many enterprises with many stores or branches utilize a variety of third-party delivery providers. This is especially true for brands or companies with locations across states, regions, or countries.
Managing multiple fleets owned by different entities is no easy task. You might be in partnership with the best-rated fleet in one state and use the same provider in another one despite its less stellar performance in other areas. This has the potential to slow down deliveries in many states.
The best way to manage multiple delivery providers in various locations is to have greater visibility on all fleets, regardless if these are third-parties, in-house, or a combination of both.
There are several KPIs that should be generated to compare one fleet to another. These would include time on site, drive time, operational costs, average delivery time, and customer satisfaction ratings.
Customer Satisfaction KPIs
Customer satisfaction metrics are the KPIs that most affect sustainable profits. Unfortunately, they're the KPIs that often receive the least attention.
Businesses working with third-party online sellers are blind about their customers. For example, in the food industry, aggregators generally provide businesses with information about the items ordered and the number of deliveries made. But these aggregators fail to provide information on customer satisfaction per store, per area, delivery fleet, and so on. Simply put, you have no way of knowing if customers are satisfied with the order fulfillment.
Getting and aggregating data on customer satisfaction will help executives identify the strategies that are working and make changes to ensure high customer satisfaction that creates brand loyalty among their patrons. This might be done through customer satisfaction surveys automatically sent out after delivery, to take just one example.
Gathering Data Matters—But the Tracking the Right KPIs Is Just as Important
Generating delivery data is good, but knowing which data to pay attention to and analyze is even better. Using the right last mile delivery KPIs to measure drivers, shipping and deliveries, and customer satisfaction allows you to plan strategically and ultimately drive towards optimizations. When you can make changes with confidence, it's that much easier to eliminate inefficiencies and improve your business' bottom line.