In logistics, we measure just about everything. If it moves, we measure how fast. If it sits, we measure how long. If it costs money, we measure how much.
But do we ever measure happy?
Not often, if at all. And that’s too bad. Happy is an under-rated metric.
We do, however, measure satisfied. We rely on data points from 101 different KPIs to tell us how to feel about logistics performance. This data measures customer satisfaction in logistics based on achievement of a certain performance level. But we shouldn’t confuse satisfied with happy.
How about you? Are you happy with your company’s logistics performance?
What Maslow says
The accompanying diagram shows Abraham Maslow’s well-known hierarchy of needs. His premise: people strive to be truly happy and self-actualized, but that journey is sequential. A person’s motivation to reach the top of the pyramid is contingent upon first satisfying lower-level goals, the most basic of which are physiological needs like having enough to eat.
Logistics is similar. If core metrics like inventory accuracy and on-time shipment performance are bleeding red, then happy doesn’t even enter the picture.
But these days, great logistics performance has become the norm. If you ask logistics executives if they are satisfied with and getting value from the performance of their logistics departments or their 3PLs, the vast majority will answer yes.
Are they satisfied? Yes. Warehouse and transportation teams are regularly hitting higher levels of performance than ever before.
Are they happy? Maybe.
The comfy chair and customer satisfaction in logistics
Derek Jemeyson of Sam’s Club has an analogy that may help explain the important distinction between satisfied and happy in delivering a great customer experience. When talking about his relationships with third party logistics partners, he describes types of chairs 3PLs could metaphorically be sitting in.
One is the comfy chair – a feet-up, super-comfortable lounge chair that’s hard to get out of quickly, and easy to fall asleep in. You don’t want your 3PL sitting in this chair – even if operational performance is stellar – because that’s where they can become complacent.
The second one is the basic chair – one you might find at the kitchen table. It gets the job done, but you won’t be taking a nap in it. That’s the chair you want your 3PL partner to be sitting in because they will always be alert and ready to make things happen.
The analogy reminds us that, as logistics leaders, our ultimate goal should be more than solid execution of the same daily tasks. Today, that’s the cost of the movie – the bottom of the pyramid. When we get stuck there, we trade happy for satisfied.
In 3PL outsourcing relationships, the road to satisfied is built on day-to-day performance. The road to happy, to the top of the pyramid, is a longer road that’s built on:
- Trust – a completely transparent relationship where parties openly share information.
- Collaboration – where there is no overt customer-supplier distinction. People function as part of a single team chasing a shared goal.
- Innovation – where all team members experience a perpetual sense of discomfort, constantly asking “what’s next?” and knowing they have the freedom to explore new ways of solving the business’s toughest problems.
Ideally, this is the foundation you are establishing with your strategic partners.
At KANE, we’re serious about happy. It’s the primary success measure that drives everything we do (check out our homepage happy meter).
In our experience, truly happy customers are satisfied with operational performance but, beyond that, also feel a tight connection with the provider. A sense – something difficult to measure – that the 3PL’s team is thinking and acting like part of their team. When that happens, the value created goes far beyond what’s possible from rote execution, devoid of passion and commitment.
Logistics leaders should embrace happy as a real-time time barometer of success. You may not know whether today’s order accuracy is meeting the target KPI. But you know if you are happy or not.
If you’re not, ask yourself why. Your answer becomes your roadmap to the top of the pyramid.