Logistics indicators are business indicators that can be used to calculate the profitability and performance of warehouses and the logistical processes taking place there. The key figures essentially include information about the extent to which a company is achieving its business objectives in terms of inventory and procurement. In this article, we reveal which key figures exist, what they say and how they can be calculated.

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Table of contents:

1. Key figures in logistics: What are they for?
2. What logistics figures are there? An overview
3. Calculate logistics key figures with a collection of formulas
4. Optimize controlling with logistics indicators
5. How to optimize your logistics KPIs
6. Intelligent logistics management with TradeLink

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Key figures in logistics: What are they for?

In logistics, key figures can be used to determine how economical and efficient a company's warehouse is. They are used to analyse, evaluate and control logistical processes. The evaluation can be focused on various aspects — such as the economic efficiency of yards, the supply chain, or transportation. By using the key figures to make logistics processes measurable, the company can take measures to optimize processes — because only those who know where the problem is stuck can they continuously improve.

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Key figures in logistics have the following advantages:

• Increasing warehouse performance
• Exact calculation of inventory levels and their optimization
• Improved inventory planning
• Optimum use of storage space
• Lower capital commitment
• Improving ordering processes
• Adjustment of faulty processes or processes in need of optimization

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The key figures also have the task of providing reliable forecasts of storage times, costs and utilization, as well as future order quantities — i.e. to improve forecasting capacity. In addition, the company can use the values as direct goals for its employees in order to motivate them to work more efficiently and improve their work ethic.

What is important is that not all warehouse figures are equally relevant for every company and every sector. Depending on the product range, company size, company situation and purpose, the significance of the individual indicators varies.

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Now Calculation template the most important logistics figures download!

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What logistics figures are there? An overview

Logistics indicators provide information about various complex issues by presenting extensive amounts of data in a single indicator. The following logistics figures are important if a company wants to analyze internal services and processes:

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1. Delivery accuracy

The delivery accuracy indicator determines how many orders are processed in the warehouse without disruptions and incidents from receipt to dispatch. These incidents include incomplete and faulty deliveries, delays in shipping, damage to the goods or even a total loss of the product in transit. Delivery accuracy of at least 90 percent is considered to be exceptionally good, with 10% of deliveries still involving incidents. You should therefore aim to get as close to 100% as possible here.

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2. Delivery time

Only those who can keep their promised delivery time can hope for satisfied customers. Efficient logistics processes are therefore about a correct and punctual delivery time. This can be determined in two ways: based on the on-time shipping rate and on the basis of the on-time delivery rate. While the former indicates the frequency with which the goods are shipped on the intended shipping day, the on-time delivery rate is used to evaluate the frequency with which the product also arrives on the actual delivery date.

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3. Transport and delivery costs

The aim of every company is to keep logistics costs as low as possible. Depending on the company, these consist of various sub-areas. In addition to transport and delivery costs, this also includes costs for administration, order processing and warehousing. In order to determine how high the logistics costs are, on the one hand, the transport costs can be calculated in relation to the product price and, on the other hand, the costs of the entire logistics in relation to the company's turnover (logistics cost share).

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4. Capital commitment

Capital commitment is also an important key figure in logistics — because it provides information about which capital is tied up within the company, i.e. which goods are in stock and in what quantity. The higher the number of inventories, the higher the capital commitment. Because as long as the goods from the warehouse are not processed or sold, they tie up the pre-financing costs and reduce the available capital — and thus the company's liquidity.

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5. Average inventory

As the name suggests, the average inventory indicates how many goods are in the company's warehouse on average. This logistics indicator plays an important role for the company, as it has an impact on capital commitment and storage costs. The key figure is even easier to control when the articles are divided into ABC categories and you can thus optimize the reach of the really critical articles.

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6. Average storage period

In addition to the average inventory, the average storage period can also be calculated to find out how long goods and articles are stored on average. The longer a product is in stock, the higher the capital commitment — because the goods are neither sold nor processed further and therefore entails higher storage costs.

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7. Inventory cost rate

If the company wants to set its storage costs in relation to the average inventory, it can calculate the so-called inventory cost rate (LCS). The costs for the warehouse include all costs that arise in the warehouse and have to do with warehousing. In addition to space costs for rent, depreciation, interest on loans, energy costs and insurance premiums, this also includes personnel and maintenance costs.

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8. Inventory cost rate

If the company wants to know whether the amount of warehousing costs is proportionate to the value of the goods, it can calculate the inventory cost rate. With this logistics key figure, the company can analyze whether its own warehousing is profitable and what quantities of goods it should ideally order in the future in order to keep storage costs as low as possible.

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9. Inventory turnover rate

The inventory turnover rate is a key figure that indicates how often a specific product or product leaves the warehouse and is replaced by new goods. The higher the key figure, the more often the product is sold off and reordered. The aim is to achieve the highest possible turnover rate of at least 0.5. However, the value differs from company to company in the various industries. For example, it is normal for retail or e-commerce companies to have a lower turnover rate than an industrial company.

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10. warehouse range

The logistics indicator for warehouse range is very important in order to analyse and ensure supply security within a period — because it indicates how long stocks in the warehouse last with an average material consumption. If the key figure is too high or too low, the company can make certain adjustments to optimize processes — for example by adjusting the production plan or changing the order quantities. Here, too, the analyses are made more precise by dividing the articles and materials into ABC categories.

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11. Storage interest and storage interest rate

Inventory interest and interest rate are important indicators when a company wants to determine how high the costs of capital tied up in average inventory will be during the average storage period. For example, if the company increases its inventory turnover rate, both inventory interest and inventory interest rates are reduced.

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12. reporting inventory

As an indicator in logistics, the reported inventory automatically triggers a new order in the warehouse. The aim is for production and manufacturing to continue with sufficient availability without any problems before a new delivery arrives.

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13. minimum inventory

This key figure is also known as safety stock or iron inventory. As the name suggests, the minimum inventory is the minimum quantity of goods and goods that should always be in stock. Only if the safety stock is maintained can unforeseen events such as delivery delays, loss of goods or inventory errors be intercepted and compensated for. In this context, the so-called safety coefficient can also be calculated as an indicator: With it, the company can determine the ratio of minimum inventory to average inventory.

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14. productivity

Productivity is not a key figure with a fixed value, but can be calculated based on various factors — such as machine productivity, employee labor productivity, or cost productivity. Regardless of which services the company wants to evaluate, this logistics indicator always sets output in relation to input.

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15. Inventory accuracy

This indicator, often referred to as “inventory quality” or “stock accuracy,” is perhaps the most critical variable for reflecting the quality and reliability of a warehouse. The goods (target) digitally displayed in the inventory management system and the goods actually physically present in the warehouse (actual) must necessarily be identical in order to be able to correctly control the scheduling and procurement based on this. Unexpected shortfall leads directly to availability and supply problems. Ideally, there is no difference between target and actual and the value is 0. The reality is often 70 or 80%. But realistically, this figure must certainly exceed 98%, because otherwise no secure supply from the warehouse can be guaranteed.

Identified differences between target and actual require complex warehouse inventories in order to identify and correct deviations.

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16. Inventory/sales ratio

In logistics, this key figure indicates how high the share of sold goods and goods is in the total inventory. By calculating the inventory code, the company can determine whether and if so, to what extent there is excess inventory.

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17. Supplier compliance

Finally, a company can also calculate the so-called supplier compliance in order to obtain information about the reliability of its suppliers. By comparing different suppliers, a high level of reliability and work ethic can be ensured — because if the supplier does not comply with the agreed framework conditions, the company can look for a service provider that has a higher supplier compliance rate. This is important, for example, as part of Supplier management in accordance with ISO 9001.

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Calculate logistics key figures with a collection of formulas

If a company wants to calculate the various logistics figures, it can use the following formulas:

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Delivery accuracy = number of orders without incidents/ number of total orders x 100

Delivery time/On-time shipping rate = number of deliveries shipped at the scheduled time/ number of total deliveries x 100

Delivery time: On-time delivery rate (also known as on-time delivery) = number of deliveries arrived at the scheduled time/ number of total deliveries x 100

Transport costs in relation to product price = Transport costs per product/sales price per product x 100

Logistics cost share = Logistics costs/turnover x 100

Capital commitment = Average inventory x (procurement costs/order quantity)

Average inventory = (starting inventory + ending inventory)/2

Average storage period = 360 days x average inventory/annual consumption

Inventory cost rate = inventory costs/average inventory value x 100

Inventory cost rate = inventory cost rate + imputed interest rate

Inventory turnover rate = Revenue/value of average inventory

Warehouse range = average inventory (of the period)/consumption (per period)

Inventory interest rate = interest rate (p.a.) x average storage period (in days)/360 days

Inventory interest = average inventory x inventory interest rate/100

Reporting inventory = daily consumption x delivery time + minimum stock

Minimum inventory = consumption per day x delivery time

safety coefficient = minimum stock/ average inventory x 100

productivity (e.g. picks/employees) = output/ input

Inventory accuracy = number of goods recorded in the ERP system - number of goods actually available

Inventory/sales ratio = value of goods sold/value of goods in warehouse

Vendor compliance rate = orders received late/total orders received x 100

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How to optimize your logistics KPIs

Use digitization and automation

The introduction of digital tools such as slot management systems, real-time tracking and AI-based route planning can help to minimize delays and make processes more efficient.

Software, such as that from TradeLink, offers a simple and quick way to automate time slot booking. ‍

Make data-based decisions

The continuous analysis of KPIs makes it possible to identify weak points at an early stage and to take targeted measures to improve them.

TradeLink has developed the Insights Cockpit for this purpose, which shows you all your logistics KPIs at a glance and suggests optimizations.

Improve collaboration with partners

Close cooperation with suppliers and transport service providers ensures better coordination and smooth processes — especially when booking slots and receiving goods on time. TradeLink has a delivery partner adoption rate of over 90%.

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Optimize controlling with logistics indicators

Objective of logistics controlling is to coordinate and optimize logistical processes within the company. In order to achieve these goals, certain logistics indicators are required, which in turn serve as a planning tool to be able to control the planned goals. In order to achieve these, the warehouse must work economically and efficiently. All factors, from warehouse equipment to technology and personnel, must be coordinated. Employees must always know what they have to do, processes must run smoothly and changes and potential need for optimization must be identified at an early stage.

Key figures are therefore of immense importance in logistics. It is crucial that employees evaluate the correct warehouse figures, use correct data and carry out the analysis of the key figures under the same framework conditions. Real-time figures are essential for operational and strategic management of processes — because this is the only way to ensure that, for example, the delivery quality per delivery partner is correctly calculated and can be retrieved at any time.

Paper jams, written notes, unstructured Excel spreadsheets and emails, on the other hand, stand in the way of such strategic management. However, these are still the prevailing standard in many logistics companies today. For example, showed our study When asked whether the relevant logistics and warehouse figures are available to 100+ logistics decision makers at all times, an obvious no: More than 70 percent of companies maintain the status of their Incoming goods still in paper form.

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Download the study now

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This not only leads to a high level of potential errors and discrepancies, but also to an immense amount of time when the company wants to determine important key figures. It is therefore not uncommon for employees to spend days digitizing data and assigning suppliers.