Supply Chain KPIs You Need to Track
Last Updated: November 2025
You cannot improve what you do not measure. In the complex world of logistics, where countless moving parts must work in harmony, this statement is a fundamental truth. Key Performance Indicators (KPIs) are the instruments on your supply chain dashboard, translating operational activities into hard numbers that reveal what’s working, what’s broken, and where the opportunities for improvement lie.
TL;DR:
Supply chain KPIs are quantifiable metrics used to track the efficiency, cost-effectiveness, and quality of your logistics operations. Tracking KPIs like on-time delivery, inventory turnover, and truck turn time is essential for identifying inefficiencies and making data-driven decisions. Modern logistics platforms, including WMS (Warehouse Management System), YMS (Yard Management System), and dock scheduling systems, are crucial for accurately capturing and improving these metrics.
A supply chain without KPIs is like flying a plane without instruments. You might be moving forward, but you have no precise way of knowing your speed, altitude, or direction. Are your shipping costs too high? Is your inventory accuracy correct? Are you fulfilling orders as quickly as your competitors? Without data, the answers are just guesswork.
KPIs replace assumptions with facts. They provide a clear, objective view of performance across different areas—from inventory management and warehousing to transportation and final delivery. This data-driven clarity empowers managers to spot negative trends early, validate the impact of process changes, and align operational teams around common goals.
The Strategic Importance of Tracking KPIs
Tracking the right KPIs is not an academic exercise; it is a core business function with direct impacts on profitability and customer satisfaction. A consistent focus on performance metrics helps companies reduce operational costs by identifying waste, such as excess inventory or unnecessary transportation fees.
Moreover, KPIs are the bedrock of a customer-centric supply chain. Metrics like on-time delivery and order accuracy are direct measures of the customer experience. Improving these numbers leads to greater customer loyalty and a stronger brand reputation. Ultimately, what gets measured gets managed, and a well-managed supply chain is a powerful competitive advantage.
Critical Supply Chain KPIs to Track
While there are hundreds of potential metrics, a handful of KPIs provide the most insight into the health and efficiency of a supply chain. These can be grouped into several key categories.
1. Inventory Management KPIs
These metrics measure how effectively you manage your stock.
- Inventory Turnover: This KPI shows how many times your entire inventory is sold and replaced over a specific period. See tips for optimizing inventory turnover.
- Inventory Accuracy: This measures the difference between your recorded inventory and your actual physical inventory. An accuracy rate below 99% often points to systemic issues in receiving, put-away, or picking processes. A Warehouse Management System (WMS) is the primary tool for driving this number up—read more about solving inventory accuracy.
2. Warehousing and Fulfillment KPIs
These KPIs focus on the efficiency of operations inside your facility.
- Truck Turn Time: This measures the total time a truck spends at your facility, from gate-in to gate-out. Learn more in our deep-dive guide. A dock scheduling system is the most effective tool for reducing this metric.
- Order Picking Accuracy: Calculated as (Total Orders - Incorrect Orders) / Total Orders, this KPI measures the percentage of orders picked without errors. Read how to boost picking accuracy.
- Cost Per Order: This is the total warehouse cost (labor, space, supplies) divided by the number of orders shipped.
3. Transportation and Logistics KPIs
These metrics track the performance of your inbound and outbound shipping.
- On-Time Delivery (OTD): This is the percentage of orders delivered to the customer by the promised delivery date.
- Transportation Costs: This includes all expenses related to moving goods, such as fuel, freight charges, and accessorial fees like detention and demurrage.
- Detention/Demurrage Fees: These are penalties charged by carriers when their trucks or containers are held at your facility longer than the allotted free time.
How Technology Enables KPI Measurement and Improvement
Tracking KPIs manually with spreadsheets is prone to error and provides a delayed, historical view. Modern logistics technology automates data collection, providing a real-time, accurate picture of performance.
- A Dock Scheduling System automatically time-stamps every truck's arrival, dock time, and departure, giving you a precise and effortless way to track Truck Turn Time and carrier on-time performance. This data helps you identify inefficient carriers or internal process delays.
- A Yard Management System (YMS) tracks the location and status of every trailer, helping to reduce the time it takes to find and move trailers to the dock. This directly improves turn times and minimizes the risk of detention fees.
- A Warehouse Management System (WMS) is the engine for tracking inventory and fulfillment KPIs. It maintains near-perfect inventory accuracy, tracks order picking accuracy down to the individual worker, and provides the data needed to calculate cost-per-order.
Quick Tip:
When implementing a new logistics platform, establish your baseline KPIs first. This will allow you to clearly measure the ROI of the technology by tracking the improvement in key metrics before and after implementation.
Getting Started with Your Supply Chain KPI Program
KPI Category | Key Metrics to Track | Primary Technology for Improvement |
|---|---|---|
Inventory | Inventory Turnover, Inventory Accuracy | |
Warehousing | Truck Turn Time, Order Picking Accuracy, Cost Per Order | |
Transportation | On-Time Delivery, Transportation Costs, Detention Fees | Dock Scheduling System, TMS |
Customer Service | Order Fill Rate, Perfect Order Percentage | WMS, Order Management System (OMS) |
Cost Control | Cost Per Order, Total Logistics Cost | WMS, YMS, Dock Scheduling, TMS |
Frequently Asked Questions
How many KPIs should we track?
Start with a small, focused list of 5-7 critical KPIs that align with your most important business goals (e.g., reducing costs or improving customer service). It’s better to track a few metrics well than to be overwhelmed by too much data.
What is the difference between a KPI and a metric?
A metric is any quantifiable measure (e.g., number of orders shipped). A Key Performance Indicator (KPI) is a metric that is tied directly to a strategic business objective and is used to measure progress toward that goal. All KPIs are metrics, but not all metrics are KPIs.
How do we get our teams to care about KPIs?
Make the KPIs visible. Display performance on dashboards in the warehouse and review them in regular team meetings. When employees can see how their work directly impacts the numbers and contributes to company goals, they become more engaged in the improvement process.
Turning Data into a Competitive Advantage
Supply chain KPIs are more than just numbers on a report; they are the voice of your operation, telling you where you are succeeding and where you need to focus your efforts. By selecting the right metrics and leveraging modern technology to track them accurately, you can move from reactive problem-solving to proactive, data-driven management.
The journey to operational excellence begins with measurement. By implementing systems like a WMS and a dock scheduler, you create a foundation of reliable data that empowers your team, enhances accountability, and transforms your supply chain into a powerful engine for growth.
