Assisting with identifying Carrier KPI’s and target setting
Client: Multinational (US Exporter)
Background and situation
- Following a deterioration in the performance of Transpacific ocean liner networks, a large USA exporter found itself struggling to meet commercial commitments to its customers in Asia.
- The client contacted Drewry for advice regarding which KPIs and target values to set their shipping line providers as part of the RFP process that would enable them to retain their reputation for reliable and timely supply.
- The KPI rationale and independently assessed metrics needed to be presented to and agreed by key internal stakeholders and form the basis for a more resilient supply chain network serving key growth markets.
- Drewry developed a ‘Shipping Line Reliability’ framework with four components. For each component, the formal report detailed the main drivers and quantified their benchmark values, recent market trends and/or best practices using our proprietary databases as well as vessel and terminal tracking data, industry surveys and primary research with key market players
- Drewry then calculated realistic lead times, by loop and portpair, for different levels of confidence and showing the impact of each reliability component in the overall shipment delays.
- These quantitative analyses enabled Drewry to prioritise its recommendations which were delivered to the customer in a 7-step plan to improve the customer’s relationships with its vendors including the implementation of a KPI program with 5 KPI’s.
- Drewry recommended a set of 5 KPI’s along with their precise definitions, measurement methods and target values. As part of the solution, Drewry also provided best practice advice and actionable insights which assisted the client with their implementation.
- With the insight and technical evaluation provided, the customer’s logistics team had the independent validation required to recalibrate expectations with internal leadership teams as well as customers and shipping lines. Several metrics, including safety stock levels, were re-adjusted to cater for the ‘new normal’ in liner shipping.
"Drewry’s thorough analysis and practical recommendations enabled us to adjust our internal organisation to the ‘new normal’ in liner shipping. Our international supply chain has become more resilient and we have improved the accuracy of our customer promises in a context of reducing liner shipping network performance”."
Senior Director Global Logistics – Multinational US exporter