Logistics is easy to measure and teams are judged on a handful of KPIs (key performance indicators). The best ones are few, clear and tied to what customers care about.
On-time delivery is the share of shipments that arrived when promised. Fill rate and OTIF (on time in full) came up in How supply chains work; in a warehouse, order accuracy (the right items in the right quantities) is the one pickers and packers own.
The perfect order rate rolls several into one: the share of orders that were on time, complete, undamaged and with the right paperwork. Because an order has to pass every test, you multiply the rates: 95% on time × 98% complete × 99% undamaged = 0.95 × 0.98 × 0.99 ≈ 0.922, so only about 92% of orders were perfect, worse than any one measure on its own.
On the cost side, teams track cost per order (total warehouse cost ÷ orders shipped), freight cost per unit or per kilo, and freight as a percentage of sales. Capacity use matters too: how full the trucks and containers are (cube utilisation) and how full the warehouse is. A warehouse much over about 85–90% full gets slow, because there's no room to move stock around.
Numbers can mislead when they're watched one at a time. Cut freight costs by shipping only full trucks, and on-time delivery drops. Push pick speed, and accuracy slips. That's why good dashboards put cost, speed and quality side by side.
On time 90%, complete 90%, undamaged 100%, paperwork right 100%. What's the perfect order rate, as a percentage?
| KPI | Key performance indicator. |
|---|---|
| On-time delivery | Shipments on time ÷ all shipments. |
| Perfect order rate | Product of on time, complete, undamaged, paperwork. |
| Cost per order | Warehouse cost ÷ orders shipped. |
| Cube utilisation | How full the truck or container is. |