Thanks to the new sales force automation enabling to collect granular data, consumer goods distribution is becoming more and more data-driven. As such, it can be managed more scientifically, thanks to the use of the right KPIs. Defining the right KPIs to measure and ensure you are measuring them well and consistently represents a key success factor in a successful commercial activity. Below is a list of KPIs that can be useful to track the performance, as a reference. Pick the ones that make sense based on your sector/activity, including distribution metrics such as inventory management, order accuracy, and space utilization.
Understanding Distribution KPIs
Distribution KPIs (Key Performance Indicators) are essential metrics used to measure the performance of a distribution business. These KPIs help businesses evaluate their operational efficiency, customer satisfaction, and financial performance. By tracking distribution KPIs, businesses can identify areas for improvement, optimize their operations, and make data-driven decisions. Whether it’s monitoring on-time delivery rates, assessing inventory turnover, or evaluating customer complaints, these metrics provide valuable insights that drive strategic planning and operational excellence in the distribution industry.
What Are Key Performance Indicators (KPIs)?
Key Performance Indicators (KPIs) are quantifiable measures used to evaluate the performance of a business or organization. KPIs are designed to provide insights into specific aspects of a business, such as customer satisfaction, inventory management, or financial performance. By tracking KPIs, businesses can monitor their progress towards their goals and make adjustments to improve their performance. For instance, tracking inventory accuracy helps in maintaining a reliable inventory management system, while monitoring customer satisfaction KPIs ensures that the business is meeting customer expectations effectively.
Operational KPIs for Distribution
Operational KPIs for distribution focus on the day-to-day activities of a distribution business. These KPIs help businesses evaluate their operational efficiency, customer satisfaction, and financial performance. By keeping a close eye on these metrics, companies can streamline their supply chain processes, reduce carrying costs, and enhance overall customer satisfaction.
Field Force Visit
- Daily visits (calls) per sales representative = total number of visits / total working days
- Client coverage (%) = Nbr. of client visited / total number of clients in portfolio
- Number of unique clients visited
- Visit frequency = average number of visits by client or client type
- Numerical distribution (%) = Nbr of shops with brand — category — product presence / total number of shops
- Work duration = Duration between Check-in at first Call and Check-out at last Call
- Instore work duration = Duration between Check-in and Check-out in the store
- Total Instore duration = Sum of all the Instore Work Duration (in general for a specific day and a specific rep)
- Transport duration = Difference between last Check-out and new Check-in
- Total Transport duration = Sum of all the Transport Duration (in general for a specific day and a specific rep)
- Route compliance or route adherence (%) = Nbr. of clients visited on the route / number of clients on the route. This metric assesses the extent to which the sales reps or merchandisers adhere to their responsibilities. It should encompass a route planner equipped with calendar scheduling capabilities to assist field workers in organizing their visits, monitoring unattended appointments, and creating compliance reports. Additionally, it should feature a navigational map, the ability to track check-in and check-out times, and a system to map the locations of merchandisers.
- Average working start / end time
- Average time spent per store
- Distance moved
Field Sales Key Performance Indicators
- Strike rate. % of visit with sales
- Sales value per day per sales representative
- Lines per productive calls. Number of products sold per visit
- Number of active sales representatives
- Number of calls (= visits with a sales)
- Drop size = sales value / number of sales
- Total quantity sold (drill down by product category / item)
- Total value sold (drill down by product category / item)
- Frequency of purchase
Vendor sales
- Sales value per day per vendor
- Asset utilization
- Working days
- Attendance / Churn
Order Fulfillment Rate
Order fulfillment rate measures the percentage of orders that are fulfilled on time and to the correct location. A high order fulfillment rate indicates that a business is able to meet customer demand and deliver products efficiently. This KPI is crucial for maintaining customer satisfaction and minimizing lost sales due to delayed or incorrect deliveries.
Inventory Accuracy
Inventory accuracy measures the accuracy of a business’s inventory records. A high inventory accuracy rate indicates that a business has a reliable inventory management system and is able to track its inventory effectively. Accurate inventory records are essential for reducing carrying costs, preventing stockouts, and ensuring that the entire inventory is accounted for. This KPI is a cornerstone of effective inventory management and helps in maintaining a smooth flow of goods within the supply chain.
Stock / Warehouse Inventory Management
- Number of crates / boxes
- % of stock by expiry date (in case of perishable stock)
- Stock level per distributor / warehouse
- % of stock in damaged state (returned)
- Each of these analytics can be drilled down per product category, brand, etc
Financial statement
- % of sales per payment type
- Bad debt level
Merchandising
- On Shelf Availability (OSA) : It quantitatively evaluates how fully the assortment matrix of the brand SKUs is represented at a sales point, particularly those products visible on the shelf. Essentially, it's a metric of product visibility. OSA is expressed in percentages, spanning from 0 to 100, where 0% indicates that none of the products from the matrix are present on the shelf, and 100% signifies that every item from the matrix is available on the shelf.
- Out of Stock (OOS): Also known as stock out, This occurs when a retail location lacks certain products or categories on its shelves, making them unavailable for purchase by customers. The key concern in this context is the visibility of products. A Stockout effectively signifies that there is 0% on-shelf availability for the items in question.
- Number of facings
- Share of Shelf (SoS) refers to the proportion of shelf space dedicated to the brand products within a certain category, relative to the space given to competitor brands' products on the same shelf within that category. The calculation is category-specific rather than being aggregated across different categories. It represents the extent to which the brand occupy the shelf space in a particular category inside a store.
- Each of these analytics can be drilled down per product category, brand, etc
Branding
- Point of Sales Material Survey (POSM): This is a review of the sales support materials provided and exhibited in stores, which play a part in the brand strategy to enhance product visibility. It offers a distinct tally of specified point-of-sale materials (POSM), such as beach umbrellas, display stands, display hangers, and so on.
- % of shops with a presence of POPM out of total number of shops
- Quality of the POPM seen (new, fair, poor)
Sales Assets (such as fridges, kiosks, etc)
- Number of assets seen in the trade
- % of shops with a presence of assets out of the total number of shops
- Utilization rate (sales per asset)
- Quality of the assets seen (new, fair, poor)
A few considerations for Customer Satisfaction
- Ideally, all these KPIs should be measured against targets.
- Each of this KPI can be measured at different levels: National; regional and lower hierarchical levels; team; per type of trade channel, such as supermarkets, Horeca, etc.
- Focus only on a few KPIs to track
- Ensure everyone is aligned on the KPI definition
- Share the KPI regularly to all the stakeholders through the relevant communication channel, email, mobile and web app
If you are interested in a solution to help you collect and track those KPIs, get in touch with us! Do you want to discover more? Read our article about How to measure Field Force Productivity as a Pro
