Logistics in China Part 2:  Rigorously Review Chinese Logistics Providers

Too often my clients will tell me that they hold quarterly business reviews (QBRs) with their logistics providers, but when I dig deeper, I find that the QBRs are nothing more than activity reviews. These meetings focus on how many shipments, containers, or millions of pounds were moved, hours worked, and other countable topics. However, a QBR should be multi-dimensional and include quality and productivity measures in addition to activity measures. Further, the quarterly evaluation process should be completed by both your company and the logistics provider, to give two-way feedback.

QBRs should include a review of topics such as:
• On-time service
• Errors by category
• Response time
• Specific problems or challenges during the past period
• Potential ways to automate the communications between companies
• Improvement in automation and processes to increase productivity
• Revenue generated per quarter and quarter-over-quarter revenue comparison
• Training and education. (For example, you should educate your logistics provider on your products and business and the logistics provider should educate the company on services and new trade compliance regulations and procedures.

Regardless of what you chose to measure, all categories and key performance indicators (KPIs) should align with your corporate goals. Managers should ask themselves the following questions: Have I read my own company’s annual report? Do I clearly understand this year’s goals and objectives? Do all of the company’s logistics KPIs support these goals? If the answer is no, the company is measuring the wrong things.

Your logistics provider should also measure your company. The logistics provider should give feedback on things like your response times, productivity improvements, issue resolution, and training. Two-way communications between the logistics provider and you will provide valuable input regarding areas where improvements need to be made on both sides.

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