In logistics, data is everything, but what happens when the data says “green” yet the operation still falls short? Many logistics organizations rely on robust KPI systems to manage performance; however, in an age of rising customer expectations and increasing complexity, tracking the wrong metrics or tracking the right ones in isolation can do more harm than good.

What’s Related

Mismatched or misleading KPIs can mask real issues in your operation. Here’s how to spot them and what you can do to uncover the full picture.

1. On-Time Delivery Is High, But Order Accuracy Is Declining

On-time delivery (OTD) is a common benchmark of logistics success. If your OTD is showing green, it’s tempting to assume everything is running smoothly. But what if the wrong items are being delivered on time?

Many logistics operations push for speed to meet rising customer expectations. If order accuracy is declining while OTD remains high, you may be prioritizing deadlines over customer satisfaction. It could signal a need for process optimization, additional headcount, or targeted quality control, not just faster throughput. 

2. Low Return Rates, But No Feedback Loop

Returns are often used as a barometer for product quality or customer satisfaction. A low return rate should be a good sign, unless you aren’t tracking the why behind those returns.

Without a feedback loop, even a low return rate can mask systemic problems. A missing or damaged component might not trigger a return, but could still frustrate the customer. Over time, these small failures erode trust and drive churn, even if the data appears positive on the surface. By building structured return reason codes and tracking them over time, you can conduct periodic reviews with customer service to identify patterns and proactively improve.

3. Accurate Inventory, But Orders Can’t Be Filled

Inventory accuracy is another core metric that can mislead when used in isolation. Your WMS might show a 98% inventory accuracy rate, but if large portions of stock are tied up in non-shippable statuses, such as damage, QA hold, or compliance quarantine, it doesn’t matter.

Customers and planners may assume stock is available when it’s not, creating tension and confusion across the supply chain. If you separate inventory visibility by status and track how long a product stays in non-shippable conditions, you can use this data to identify bottlenecks and resolve process delays.

4. Clear SLA Measurements, But Scope Has Changed

Customer SLAs are the backbone of logistics operations, but inconsistent or misconfigured service levels can skew performance tracking. If SLAs aren’t aligned or properly reflected in your systems, it’s difficult to prioritize labor or measure success uniformly across accounts.

You might be over-delivering for one customer and underperforming for another, with no clear sense of where to course-correct. Audit SLA configurations regularly and ensure your systems can support differentiated service levels without confusion. Consider creating a dashboard that shows SLA performance by customer and product line.

5. Service Levels Are Up, But Revenue Is Down

Even with strong operational KPIs, many logistics companies overlook financial performance. If billing activities, like accessorial charges, special handling fees, or chargebacks, aren’t accurately tracked or integrated into your workflow, you’re likely leaving money on the table.

Disconnected labor visibility can also lead to underreported time and cost, reducing your margins and skewing profitability metrics. Instead, integrate billing with operations and labor management tools. This builds a clear audit trail for all chargeable activities and automates invoicing where possible.

6. Strong KPI System, But No Transparency

Even the best KPI system can fall short if it’s only visible to leadership. Employees on the warehouse floor may not know how their performance contributes to broader goals. This lack of transparency can result in low morale, burnout, and a lack of recognition for top performers. It can also hinder coaching opportunities for underperformers.

Increase KPI visibility across the whole company. Give team leads and associates access to relevant metrics and performance dashboards. Recognition programs and targeted coaching can go a long way toward building a more engaged workforce.

Metrics Are Only as Good as Their Context

KPI dashboards may light up green, but that doesn’t mean your customers or your employees are happy. Mismatched metrics can create blind spots that degrade performance over time, especially if they aren’t grounded in operational reality.

To succeed in today’s logistics environment, companies need to look beyond individual metrics and instead focus on metric ecosystems, interconnected performance indicators that reflect the true health of the operation. Only then can you uncover the hidden costs, fix the root causes, and drive long-term, measurable success.

Amy Dean is VP of Operations at SC Codeworks