On-time in-full is a performance indicator measuring the ability to deliver a full order by the targeted date. The on-time in-full criterion is an important Key Performance Indicator used to assess the effectiveness of the supply chain process.
On-time delivery is a performance indicator measuring the rate of deliveries made on time. On-time delivery is the No. 1 performance figure everyone tracks. The definition of on-time delivery can vary among shippers based on their performance criteria. Some shippers are very specific and consider arriving a minute early or a minute late not on time, while others have a more generalized idea and consider the shipment on time as long as it arrives on the specified day.
Dedicated contract carriage (DCC) ensures committed capacity, and there are several metrics that measure the efficiency of an operation and help control costs.
"Shippers are leaning on us now for more capacity as they struggle with non-contracted dedicated carriers, and we work together with our customers on DCC metrics and the reason codes. We want to get better, we want to keep costs down, and a collaborative effort keeps the energy going for everybody," said Tom Scollard, vice president of dedicated contract carriage for Penske Logistics.
While there are several critical metrics, Scollard said on-time delivery is the No. 1 figure everyone tracks. The definition of on-time delivery can vary by shipper based on their performance criteria. "With some shippers, if you tell them you're going to deliver Friday, as long as you get there Friday, it is on time. Other shippers are much more specific, and if you're a minute early or a minute late, it is considered a not on time," he said.
For on-time deliveries to occur, on-time departure is essential. "One of the metrics that we're finding useful for the whole supply chain is that on-time departure with reason codes. It helps us understand if we're not off to a good start, why and how to mitigate that in the future," Scollard said. "Lots of things can happen once you're on the road that may be out of our control, but the driver being on time, the truck being there and ready to be loaded, then getting loaded and out the gate is the first step to ensure on-time delivery."
Equipment must be reliable, and Penske utilizes a rigorous preventive maintenance program to drive uptime. Penske has 24/7 roadside service and rental vehicles to keep products moving in the event of a breakdown.
Once drivers are en route, Penske's ClearChain® technology uses real-time visibility and proactive tools, such as turn-by-turn directions with traffic and weather, to help keep loads moving. "We look at the variables and mitigate the impact on our on-time delivery. We have to overcome as many variables that are thrown at us as we possibly can," Scollard said. "We also use geofencing for our departure and our arrivals, so the information is reported back and recorded in that dispatch platform. We know exactly what time product is leaving and what time product is delivered."
Most transportation expenses are generated by the mile. "Fuel is consumed by the mile and drivers are paid by the mile, so it is important to understand what your cost-per-mile is," Scollard said, adding that cost-per-mile goes hand in hand with cube percentage. "You may have a low cost-per-mile, but if you have trailers pulling out a quarter full, you're not necessarily efficient."
In a multi-stop fleet configuration environment, the cost-per-stop can drill down into expenses associated with each delivery. However, it can be more helpful to look at the cost-to-serve. "Cost-per-stop is you take your total expense and divide it by the number of stops. Cost-to-serve is much more specific to an individual customer," Scollard said. "You're taking into account really that portion of the route that truly is dedicated to that customer."
If the customer has a 1,000-mile route with four stops, and the third stop is 300 miles out but the fourth stop is 700 miles out, the cost-to-serve for each location is different. "It isn't fair to take four stops divided by the cost of that route and allocate that cost to each one of those stops. We can determine the cost-to-serve for each stop to give you the true barometer of your costs," Scollard said. "It gets down to much more specifics."
Tractor, driver and trailer utilization provide insights into efficiency. "Tractors are very expensive, and they don't have to rest. Ideally, you can run them 24 hours a day if it fits with your delivery windows," Scollard said.
Driver utilization, whether monitored by hours or miles, requires a balance. "It is no longer advantageous to look at an entire workforce and use them up to their total available hours-of-service," Scollard said, adding that Penske targets about 55 hours a week to avoid burning drivers out. "Even if the driver doesn't feel like they're burned out, they could be fatigued and lose some of their capability to operate the vehicle safely."
Monitoring trailer utilization can ensure the right amount of equipment is available. "Many times, the trailer-to-tractor ratio can become pretty high. You want to make sure that trailers aren't sitting idle too much or being used to store product instead of used on the road," Scollard said.
Some customers want to focus on minimizing empty miles. Tracking those empty miles can help shippers and Penske collaborate to optimize the network or find backhaul opportunities.
Detention costs money, and customers want to know how much detention they're experiencing and where it is coming from so they can investigate it and try to mitigate it in the future, Scollard said.
Safety is paramount, and Penske tracks several metrics, such as speed and hard brakes, to drive continuous improvement. "If we see an incident, we want to be able to get with a driver and provide coaching in the minimal amount of time, so it is still fresh in their mind before they make the same mistake again," Scollard said, adding that Penske has on-board cameras that aid in coaching.
With all metrics, the usefulness ties back to the quality of the data. "You have to have systems and processes in place that make sure the data is accurate. You lose credibility with your metrics if people are questioning the data," Scollard said. "It is very important that the carrier has controls established around the quality of the data. We have our 24/7 Transportation Support Service that helps our operations make sure their data is accurate."
Maximizing efficiency is often at the forefront of every automotive supply chain decision. It's critical to get the right quantity of the right part, delivered to the right location at the absolute right time. Failing to ensure proper part delivery could bring your operations to a grinding halt and have a catastrophic effect across the entire supply chain. Fortunately, technology is advancing at an exceptional pace giving users unprecedented access to timely data.
This level of visibility across the entire supply chain permits greater tactical decisions that can have a significant impact on the bottom line. And with technology continuing to advance, its impact on the automotive world will only continue to increase.
From collision avoidance systems to self-driving cars, smart technology is driving the future of the automotive industry. It's also shaping the future of the automotive supply chain.
Penske Logistics uses its ClearChain® technology suite to track and trace every supply chain movement. Through data capture and real-time communication, customers may see freight details down to the part-level knowing exactly what is being shipped and where it is at every point along its journey. Customers also can compare the quantity of pieces ordered to the number that shipped. In addition, they can get text or email alerts when a load is picked up, enters a certain geographical region, or is delayed.
This real-time data exchange connects logistics operations directly with the shipper. By providing a high-level, connected view of the supply chain as well granular specifics, Penske, through process management, ensures all supply chain parties exchange precise data. This allows shippers, transportation providers and customers to make necessary decisions about their operations.
"To thrive, you have to be sharp and instantly know where your products are within the supply chain. That is what gives you a competitive edge."
—Andy Moses, senior vice president of sales and solutions for Penske Logistics
ClearChain tracks the flow of inventory through and around the warehouse, monitors product velocity, and provides advanced notice of arrivals. It captures data in several ways. Incoming and outbound product information can be transmitted electronically between supply chain partners so business transactions and the related details are automatically loaded into the core system. Visibility also helps optimize door-to-door movement within the warehouse yard. ClearChain can track where trailers are, and whether they're moving or parked for later processing.
ClearChain has an app that tracks the flow of inventory throughout the distribution center. That data allows users to track a product from the initial receipt to the final pick, down to the individual SKU, ensuring a quick response in the event of a recall or spike in demand.
Penske also uses ClearChain technology to keep deliveries on time. For dedicated contract carriage (DCC) customers, Penske closely tracks drivers, who are the final link in the supply chain and provide key insights into load status. This keeps all parties in the supply chain current and enables rapid decision making if a disruption occurs.
Through additional apps, ClearChain optimizes the management of our drivers and removes any blind spots from the final mile in a delivery. This automates as much of the data exchange as possible, so drivers can focus on driving rather than manually updating information.
When Penske manages transportation for a customer, ClearChain captures and uses GPS data on carriers' loads, enabling Penske associates and their customers to see where any carrier is at any point in time. The information feeds into the operation management dashboard, which sits on top of the transportation management system and aggregates all of the data, pulling everything together.
"Visibility drives customer service and makes data accessible so customers can make tactical decisions quickly."
—Andy Moses, senior vice president of sales and solutions for Penske Logistics
For DCC customers, much of ClearChain's reporting is automated, which means no one has to wait for a driver to update the system. ClearChain utilizes a truck's electronic onboard recorder to monitor both engine and driver performance while a truck is in operation. It can communicate with the driver via a tablet, smartphone or the web. By monitoring engine data, users get added insight that can minimize breakdown-related delays, which could alter a drivers' arrival time.
When Penske is managing a load for a customer, if it falls behind, ClearChain flags it. Penske Logistics experts then identify the delay as a potential concern and communicate with the customer to determine the best course of action to minimize further disruptions.
The ability to quickly pinpoint products' locations, whether they are in the distribution center or on a trailer, can also be invaluable in the event of a recall.
With so much riding on your supply chain, just-in-time and just-in-sequence delivery of parts means it's imperative every supply chain movement must function as planned. An optimally designed automotive supply chain will help you know exactly when you'll receive inbound materials, allowing you to right-size your workforce in preparation for deliveries. It also helps you keep inventory lean, so you won't incur the expense of reserve product.
Contact Penske Logistics about our services.
Contact Penske Logistics about our services.