Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Ing.
2009
1
Q
Questions
What are logistics metrics?
Why to measure?
How can metrics be classified?
Which metrics are commonly used?
How to develop metrics?
How to measure?
2
Logistics
g metrics
Measure the performance of various logistics
functions (internal and external)
Focus on time, quality, availability, cost,
profit and reliabilityy
p
May be financial (cost and revenue) or
non financial (service and productivity)
non-financial
Include the critical success factors for all
levels of the business
3
Whyy to measure logistics
g p
performance?
To reduce operating costs
Measuring operating costs helps identify whether and
where to make operational changes to control expenses
and
d identifies
d f areas ffor improved
d asset management
To drive revenue growth
To attract and retain valuable customers, the price/value
of products offered can be enhanced through cost
reductions and service improvements in logistics activities
To enhance shareholder value
The returns on shareholder investments and the market
value of the firm are impacted by the performance of firm
logistics
4
The context of logistics
g metrics
ACTIONS MEASURES
DECISIONS
5
Classification of logistics
g metrics
Logistics Metrics
Internal External
6
Example
p of metrics
Internal metrics
loaded travel time
truck utilization =
total travel time
External metrics
No shipments within 4h of promised delivery time
service reliability =
total No shipments
7
Internal metrics drive the external
For example
example, the % of on-time deliveries of
shipments by a carrier is an external metric.
However it is driven by internal metrics:
on time departure
p of deliveryy trucks,,
reliability of trucks,
% of time on road,
road
etc.
External metrics are tipically financially and
service oriented
8
Strategic
g and operational
p level
Metrics are strategic and operational
depending on the focus and level of detail
Strategic metrics focus on overall system-level
performance
Operational metrics focus on unit-level or
machine-level performance
Example
% of travel time with full load can be measured
regarding the entire fleet (Strategic) or the single
vehicle (Operational)
In
I both
b th cases metrics
t i can b
be th
the same
9
Analysis
y of commonlyy used metrics
Logistics Metrics
Internal External
Financial
Non-Financial
10
Internal/System-level
y metrics
Example of metrics at system
system-level
level. They can
be divided into
Financial
Inventory turnover ratio
Non-financial
Non financial
% of demand met
11
Financial: inventoryy turnover ratio
Useful to evaluate the speed of movement of
goods through a company. It determines the
n mber of times in
number inventory
entor is tturned
rned o
over
er
during the year.
Transportation
Warehousing
Production
Maintenance
Vendor selection
14
Transportation:
p transit time variabilityy
Non-financial
Non financial metric that captures the
variation in transit time (TTV)
Indicates the reliability of the transportation
function
Maximum TT - Minimum TT
TTV =
Average TT
17
Maintenance: mean time to repair
p
The average active maintenance time tr
to perform corrective maintenance
It depends on the type and frequency of
failures
t r
=
ft
j j
t j
total supply
pp y - defectives
% off good t =
g d parts
total supply quantity
19
External/Customers
Customer service has 3 dimensions
Quality (Number of good parts sold, % of
shipments
hi t ddelivered
li d on ti
time,))
Time (Leadtime)
Cost (unit cost of providing a service)
Metrics
Service reliability
Customer
C complaints
l i
20
External/Government
Governments tend to measure industry
performance based on
Number of new jobs created
Revenues from taxes
N
New iinfrastructures
f t t d
development
l t
Impact on other industries
They also evaluate negative aspects such as
Pollution
Congestion
Crimes
21
External/Investors
View in monetary terms of the company
performances
Metrics
retained earnings
earnings per share =
number of shares
total debts
financial leverage =
total assets
22
How to design
g the metrics?
1 Define the system that has to be measured
1.
and its components
2. Determine the functional requirements or
p
expectations of the system
y
3. Identify metrics that can quantitatively
measure the functional requirements