Key KPIs to Track and Improve in Supply Chain Management

Most exporters don’t fail because of poor products. They fail because of delays, mismanaged stock, and unexpected costs eating into their margins. You could have the best quality, the perfect branding, and strong demand, but if your supply chain is inefficient, you’ll bleed money without even realizing it.

And fixing this isn’t guesswork. The right numbers tell you exactly where your supply chain is losing money and how to fix it.

In this blog, we’ll break down 15 key KPIs for the supply chain that every Indian exporter should watch. By the end, you’ll know how to measure, analyze, and improve each one, ensuring your business runs like a well-oiled machine.

What Are Supply Chain KPIs?

A KPI is a measurable value that shows how effectively your supply chain is meeting its goals. Instead of relying on guesswork, KPIs for the supply chain provide hard data to track performance, identify weak spots, and make informed decisions.

Why Do Exporters Need to Track KPIs?

Exporting is complex. Your goods move across borders, pass through multiple checkpoints, and rely on different vendors. Keeping track of it all manually is nearly impossible. By focusing on the right KPIs, you can:

• Reduce shipping delays and missed deadlines.
• Keep inventory levels balanced, avoiding both overstocking and shortages.
• Cut unnecessary costs in storage, freight, and handling.
• Keep your customers happy by ensuring they get the right products exactly when they need them.
• Hold suppliers and logistics partners accountable.

Now that you understand why KPIs matter, let’s look at the 15 most important KPIs for the supply chain that will help you take control of your operations.

15 Essential Supply Chain KPIs for Indian Exporters

Tracking the right KPIs can mean the difference between a smooth-running export business and one that constantly struggles with delays, high costs, and lost customers. Below are the 15 key KPIs for the supply chain that every Indian exporter should monitor.

1. On-Time Delivery (ETAs)

What it measures: The percentage of shipments delivered on or before the promised date.

Why it matters: Late deliveries hurt your reputation, cause payment delays, and may even result in penalties from buyers. Exporters dealing with international clients must stick to strict delivery schedules, especially when shipping perishable or seasonal goods.

How to improve it:

• Work closely with freight forwarders to get real-time tracking updates.
• Use reliable shipping partners with a strong track record.
• Plan shipments well in advance to account for customs clearance and potential delays.

2. Inventory to Sales Ratio (ISR)

What it measures: The ratio of unsold stock compared to total sales over a given period.

Why it matters: Holding too much stock locks up your money, but not having enough means missing out on sales. A balanced ISR ensures that you’re neither overstocked nor understocked.

How to improve it:

• Use demand forecasting tools to adjust stock levels based on order patterns.
• Maintain strong coordination between sales and inventory teams.
• Identify slow-moving stock and create plans to clear it before it affects cash flow.

3. Carrying Cost of Inventory

What it measures: The total cost of storing unsold inventory, including warehousing, depreciation, and insurance.

Why it matters: High storage costs eat into your profits. If your carrying costs are too high, it may mean that you are holding too much inventory or not selling fast enough.

How to improve it:

• Optimize warehouse space and reduce unnecessary storage.
• Negotiate better storage rates with third-party logistics providers.
• Implement a Just-in-Time (JIT) inventory system to keep stock levels lean.

4. Purchase Order Tracking

What it measures: The time it takes for suppliers to process, ship, and deliver raw materials or finished goods.

Why it matters: If suppliers take too long to fulfill orders, your entire supply chain slows down. Consistently tracking this KPI helps exporters identify slow or unreliable suppliers.

How to improve it:

• Set clear timelines and penalties for delayed shipments in supplier contracts.
• Partnering with several suppliers helps you avoid relying too much on just one, keeping your supply chain running smoothly even if delays or issues come up.
• Automate purchase order tracking using supply chain management software.

5. Days Sales of Inventory (DSI)

What it measures: The average number of days it takes to sell your inventory.

Why it matters: A high DSI means stock is sitting in your warehouse for too long, increasing storage costs. A low DSI means products are selling quickly, which is generally a positive sign.

How to improve it:

• Improve sales forecasting to avoid excess stock.
• Offer promotions or discounts to move slow-moving inventory faster.
• Reduce lead times by sourcing raw materials and products more efficiently.

6. Freight Cost per Unit Shipped

What it measures: The total transportation cost per unit of product shipped.

Why it matters: If freight costs are too high, they can significantly impact profit margins. Exporters need to optimize their logistics strategy to keep costs low.

How to improve it:

• Consolidate shipments to get better rates from shipping providers.
• Negotiate bulk discounts with logistics partners.
• Choose efficient shipping routes to reduce transit time and fuel costs.

7. Perfect Order Delivery Rate

What it measures: The percentage of orders that arrive on time, complete, and in perfect condition.

Why it matters: Even if an order arrives on time, missing items, damaged goods, or incorrect documentation can create major headaches. A high perfect order rate means your logistics process is running smoothly.

How to improve it:

• Implement strict quality control checks before shipment.
• Train warehouse staff to minimize packaging and labeling errors.
• Automate order tracking systems to monitor shipments in real-time.

8. Supplier On-Time Delivery

What it measures: The percentage of times your suppliers deliver materials or products on schedule.

Why it matters: If suppliers are late, production and shipping schedules are thrown off, leading to missed delivery deadlines for your buyers.

How to improve it:

• Partner with suppliers known for their consistency and reliability.
• Set clear expectations and penalties for late deliveries.
• Develop backup supplier options to reduce dependency on a single vendor.

9. Customer Order Cycle Time

What it measures: The total time taken from receiving a purchase order to deliver the final product to the customer.

Why it matters: Faster order cycle times lead to better customer satisfaction and more repeat business. Long delays can lead to cancellations or penalties from international buyers.

How to improve it:

• Automate order processing to reduce manual delays.
• Use express shipping methods for urgent orders.
• Improve coordination between sales, warehouse, and logistics teams.

10.  Cash Conversion Cycle (CCC)

What it measures: The time it takes to convert inventory into cash flow after a sale.

Why it matters: A shorter CCC means you get paid faster and can reinvest in your business. If your CCC is too long, your money is stuck in inventory and unpaid invoices.

How to improve it:

• Offer early payment discounts to buyers.
• Improve invoicing and follow up on payments aggressively.
• Reduce stock levels to free up working capital.

11. Return Rate

What it measures: The percentage of orders that are returned due to defects, damage, or incorrect shipments.

Why it matters: High return rates indicate problems with product quality, packaging, or order accuracy. Every returned order means additional costs and potential damage to your reputation.

How to improve it:

• Strengthen quality control before shipments leave the warehouse.
• Use better packaging to prevent damage during transit.
• Double-check order details to ensure customers receive the correct items.

12. Warehousing Accuracy Rate

What it measures: The percentage of orders picked, packed, and shipped without errors from the warehouse.

Why it matters: Mistakes in warehousing can lead to incorrect shipments, delays, and dissatisfied customers. A high accuracy rate means your warehouse operations are running smoothly.

How to improve it:

• Implement barcode scanning and automated picking systems.
• Train warehouse staff to follow strict inventory management protocols.
• Conduct regular checks to identify and fix any mistakes before shipments are sent out.

13. Supply Chain Cycle Time

What it measures: The total time taken to complete an entire supply chain cycle—from ordering raw materials to delivering the final product.

Why it matters: A shorter cycle time increases efficiency and reduces costs. If this metric is too high, it may indicate delays in production, shipping, or supplier reliability.

How to improve it:

• Reduce dependency on slow or unreliable suppliers.
• Automate workflows to speed up processing times.
• Improve forecasting to reduce wait times for materials and stock.

14. Compliance Rate

What it measures: The percentage of shipments that meet all regulatory and customer compliance requirements, including documentation, packaging, and labeling.

Why it matters: Exporters need to comply with customs regulations, product standards, and buyer requirements. Non-compliance can mean heavy fines, shipping delays, or even having your orders turned away.

How to improve it:

• Train staff to stay updated on export regulations.
• Use compliance management software to track legal requirements.
• Work with freight forwarders who understand destination country rules.

15. Logistics Efficiency Ratio

What it measures: The ratio of logistics costs to total revenue.

Why it matters: If logistics costs are too high compared to your revenue, it eats into your profit margins. This KPI helps you find cost-saving opportunities in transportation, warehousing, and distribution.

How to improve it:

• Consolidate shipments to reduce per-unit freight costs.
• Optimize delivery routes to lower fuel and transit expenses.
• Negotiate better rates with logistics providers based on volume.

Exporting is complex, but technology can make it easier. Let’s see how Pazago can simplify your supply chain and improve your KPI performance.

How Pazago Improves Supply Chain Performance

Pazago provides exporters with solutions to track and enhance key performance metrics. From shipping reliability to compliance, Pazago simplifies operations, helping you stay ahead in the competitive export market.

• Simplified Document Management: Keeping track of export paperwork can be overwhelming. Pazago centralizes essential documents into a single platform. This reduces errors, speeds up processing, and ensures compliance with regulations.
• Optimized Cross-Border Logistics: Pazago helps optimize shipping routes for faster, more reliable international deliveries. This ensures smoother logistics and cost-effective transportation.
• Real-Time Shipment Monitoring: Pazago provides real-time shipment tracking, alerting you to delays and potential issues before they escalate. 
• Pre-Shipment Quality Inspections: Pazago offers built-in quality checks, ensuring goods meet buyer and regulatory standards before they leave the warehouse. This reduces return rates and customs-related delays.
• Smarter Financial Solutions: Get faster payments, currency conversions, and financing options. This helps exporters maintain steady cash flow and reduce financial risks.

By integrating these features, Pazago helps exporters improve efficiency, reduce supply chain costs, and ensure smoother global trade operations.

Conclusion

Exporting comes with its share of challenges. Delays, high costs, and inefficiencies can quickly add up. But by tracking the right supply chain KPIs, you can identify weak spots, reduce risks, and improve overall performance. From on-time deliveries and inventory management to cost control and supplier reliability, these metrics give you a clear picture of where your business stands and what needs improvement.

However, monitoring and optimizing these KPIs for the supply chain can be time-consuming. That’s where Pazago comes in. With centralized document management, real-time shipment tracking, optimized logistics, and smart financial tools, Pazago helps you streamline operations and improve key supply chain metrics effortlessly.

Ready to improve your supply chain performance? Book a demo today and see how it can help you reduce costs, eliminate delays, and scale your export business efficiently!