For businesses with substantial warehouses, plants, and distribution centers, the metric ‘Shipped Damage-Free’ is critical. This article delves into the definition, methods to calculate, strategies and technologies essential for achieving this critical Key Performance Indicator (KPI)- Damage free shipments.
Overview:
The Imperative of Damage-Free Shipments
Shipping goods without damage is not just about preserving the physical integrity of products; it’s a commitment to quality and customer satisfaction. A high ‘Shipped Damage-Free’ rate reflects a company’s excellence in handling, packaging, and logistics, directly influencing customer trust and brand reputation.
“Damage Free Shipping” is a key performance indicator (KPI) that measures the percentage of shipped products that arrive at their destination without any damage. To calculate this KPI, you need two pieces of information:
1. Number of Products Shipped Without Damage (Good Products):
Count the number of products that reached their destination without any damage during a specific period.
2. Total Number of Shipped Products:
Count the total number of products that were shipped during the same period, regardless of whether they were damaged or not.
The formula for “Damage Free Shipping” KPI is then:
Damage Free Shipping = (Number of Products/Total Number of Shipped products)* 100
Here’s an example:
In a given month, a company shipped 1,000 products. Out of these, 950 products reached their destination without any damage.
Using the formula:
Damage Free Shipping} = {950/1000} 100 = 95%
So, the “Damage Free Shipping” KPI for that month is 95%. This means that 95% of the shipped products arrived at their destination without any damage.
Strategies for Achieving Damage-Free Shipments
1. Enhanced Packaging and Handling Protocols
The first line of defense against product damage lies in robust packaging and careful handling.
Customized Packaging Solutions: Employing packaging tailored to the specific needs of the product, considering factors like size, weight, fragility, and environmental conditions.
Standard Operating Procedures (SOPs) for Handling: Developing and enforcing SOPs for product handling that minimize the risk of damage. This includes training for staff on best practices for handling delicate or heavy items.
Quality Control Checkpoints: Establishing checkpoints at various stages of the order fulfillment process to inspect and ensure the integrity of the packaging and the product.
2. Leveraging Technology for Preventive Measures
Integrating advanced technologies is crucial in preempting and reducing the incidence of damage during shipping.
Automated Packaging Systems: Implementing automated packaging solutions that can consistently package products to predefined standards, reducing human error.
Real-Time Monitoring Systems: Using IoT sensors and RFID tags to monitor the conditions of goods during transit, alerting logistics personnel to any conditions that could lead to damage.
RF/Barcode scanning Applications: Provide instructions to material handlers during packing, implement business logic to map between material/items and containers so warehouse staff won’t pack goods into random cartons/boxes.
Advanced Data Analytics: Utilizing the data analytics capabilities of SAP S/4 HANA or Oracle Fusion Cloud to analyze historical shipping data, identifying patterns or routes that have higher incidences of product damage and taking preventive measures.
3. Optimizing Transportation and Storage
The way products are transported and stored plays a significant role in ensuring they reach their destination damage-free.
Load Optimization Software: Using software to optimize how goods are loaded into transportation vehicles, ensuring that they are securely placed and balanced to minimize movement during transit.
Climate Control in Warehousing and Transit: For temperature-sensitive products, ensuring that storage areas and transportation vehicles are equipped with proper climate control systems.
Routine Equipment Maintenance: Regularly maintaining and inspecting equipment used in warehousing and transportation to ensure they are in optimal condition, thereby reducing the risk of product damage.
4. Continuous Improvement and Collaboration
A culture of continuous improvement and collaboration is key to sustaining high damage-free shipping rates.
Feedback Loops with Customers and Partners: Establishing mechanisms to receive feedback from customers and logistics partners on the state of delivered goods, using this information to continuously improve processes and handling techniques.
Cross-Functional Collaboration: Encouraging collaboration between different departments such as warehousing, logistics, quality control, and procurement to collectively address the challenge of shipping damage-free products.
Employee Empowerment and Engagement: Empowering employees with the right tools and training to make informed decisions that contribute to the integrity of shipped goods.
5. Reduce Damage Claims
By using Propel Apps’ electronic bill of lading application, shipping clerks can take photos of the goods shipped and archive the documents in the cloud. These proof of shipping photos can be used to dispute/challenge customers’ damage claims. There is a possibility that the carrier could have damaged the goods during transit. This solution integrates with both SAP and Oracle ERP systems. You can take digital signatures from carriers and provide the digital bill of lading to customers through a self-service customer portal.
Conclusion: A Commitment to Excellence
Achieving a high rate of ‘Shipped Damage-Free’ is a clear indicator of a company’s commitment to operational excellence and customer-centricity. By implementing rigorous packaging and handling protocols, leveraging advanced technologies, optimizing transportation and storage, and fostering a culture of continuous improvement and collaboration, businesses can significantly reduce the incidence of product damage during shipping. This not only ensures customer satisfaction but also enhances the efficiency and cost-effectiveness of supply chain operations. In today’s competitive marketplace, excelling in this KPI is not just an operational goal; it’s a strategic necessity. Get in touch, Today!
