The end of Superbowl XLIX was certainly one for the ages.
It had everything a fan could hope for – excitement, drama and unbelievable final plays. And as I watched that final Seattle play, I couldn’t help but think about the importance of KPIs.
The Seahawks running back Lynch was averaging over four yards per carry. The team was at the one yard line. Even when New England knew he was getting the ball, they couldn’t stop him.
Seattle needed one more run play… well… you know how it ended. They ignored the numbers, threw the ball, and lost the ball and championship.
There’s a reason KPI stands for Key Performance Indicator.
It’s ‘Key’ because it’s a revealing number. Like how Lynch’s average suggested he was going to gouge the New England ‘D’ and score a touchdown to win the championship.
It’s ‘Performance’ tells you about what he’s doing while he’s on the field. Like he was on pace to possibly win the Superbowl MVP with the results he was getting on the field.
‘Indicator’ just means it’s a data point for use in decision making. Like if you only need one yard and he’s averaging over four, it probably means he’s going to be dancing in the back of the end-zone and not at the goal line…
When used correctly KPI’s set, track and achieve objectives.
Follow them like New England does and you win championships. Deviate from them and you may have to answer a lot of uncomfortable questions.
Now I’m sure the Seattle coaches were working with a lot more data than I know. I’m a logistics professional, not a football coach.
But just as coaches (often) use KPIs to guide decision making, businesses dealing with logistics should have a determined set they use as well when working on their goals. These metrics determine operational efficiency, profitability and expose areas of weakness.
Some common supply chain metrics include:
- Delivery in Full
- Cost as % of sales
- Inventory turns
- Performance to Promise
- Ontime Shipping and Delivery
- And many more…
To make the most of KPIs…
Focus on the KPIs relevant to the overall goals of your organization or department. And it’s generally recommended to work with only 3-5 data points. More than that and the data can get overwhelming.
Every goal should be partnered with specific KPIs. These will provide invaluable help with analysis, so you know where you’re at (like at the one yard line). They may reveal industry trends and competitive information (like your running back is gashing the opposing defense).
Ultimately, they’ll give guidance when faced with a decision related to your goal. And when used correctly, they’ll indicate just how close you are to dancing in the back of the end-zone.
One more consideration…
Collecting and managing data should not be a daunting task. Technology today does the work. If you want to take advantage of the powerful information KPIs possess, consider seeking out a logistics partner like a third party logistics firm. Most 3 PLs live and die by KPIs and their technology (I know I do!).