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Logistics Performance Metrics

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Ing. Andrea Campagna Logistics Performance Metrics 2011 Corso di Trasporto delle Merci e Logistica * Esempio dati per calcolo indicatori * Esempio dati per calcolo ... – PowerPoint PPT presentation

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Title: Logistics Performance Metrics


1
Logistics Performance Metrics
Ing. Andrea Campagna
  • 2011

2
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?

3
Logistics metrics
  • Measure the performance of various logistics
    functions (internal and external)
  • Focus on time, quality, availability, cost,
    profit and reliability
  • May be financial (cost and revenue) or
    non-financial (service and productivity)
  • Include the critical success factors for all
    levels of the business

4
Trends in logistics measurement
  • Most United States firms do not comprehensively
    measure logistics performances
  • Even the best performing firms fail to realize
    their productivity and service potential
    available from logistics performance measurement
  • Logistics competency will increasingly be viewed
    as a competitive differentiator and a key
    strategic resource for the firm
  • (Council of Logistics Management, 2001)

5
Why to measure logistics performance?
  • To reduce operating costs
  • Measuring operating costs helps identify whether
    and where to make operational changes to control
    expenses and identifies areas for improved 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

6
The context of logistics metrics
7
Classification of logistics metrics
Logistics Metrics
External
Internal
  • Internal metrics measure the performance of the
    system or the internal components of the
    logistics system (production plant, warehouses,
    transportation equipment)
  • External metrics reflect the expectations of the
    organization by external entities (customers,
    stockmarkets, government, third-party agencies)

8
Example of metrics
  • Internal metrics
  • External metrics

9
Internal metrics drive the external
  • For 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 of delivery trucks,
  • reliability of trucks,
  • of time on road,
  • etc.
  • External metrics are tipically financially and
    service oriented

10
Strategic and operational 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 both cases metrics can be the same

11
Analysis of commonly used metrics
Logistics Metrics
External
Internal
System-level
Function-level
Customers
Government
Investors
Financial
Non-Financial
12
Internal/System-level metrics
  • Example of metrics at system-level. They can be
    divided into
  • Financial
  • Inventory turnover ratio
  • Non-financial
  • of demand met

13
Financial inventory turnover ratio
  • Useful to evaluate the speed of movement of goods
    through a company. It determines the number of
    times inventory is turned over during the year.
  • Higher ratio is better!

14
Non-financial of demand met
  • It is an indicator of the operational
    capabilities of a company
  • Reasons for low can be poor forecasting,
    insufficient capacity, low inventory levels, poor
    quality and unreliable production and
    distribution system

15
Internal/Function-level metrics
  • Example of metrics related to the main logistics
    functions in the supply chain
  • Transportation
  • Warehousing
  • Production
  • Maintenance
  • Vendor selection

16
Transportation transit time variability
  • Non-financial metric that captures the variation
    in transit time (TTV)
  • Indicates the reliability of the transportation
    function
  • Less variability in transit time helps customers
    plan the work more efficiently

17
Warehousing operating cost per unit
  • Financial measure of the cost-effectiveness of
    operating a warehouse depends on warehouse size
    and throughput
  • Fixed cost (increases with size)
  • Building, equipment, fixed payroll
  • Variable cost (increases with loads processed)
  • Contract manpower, variable utilities, fuel
  • Overhead cost
  • Heating, lighting, insurance, taxes

18
Production defectives
  • Defectives not fixable have to be scrapped,
    bringing down the production rate
  • The unit cost of production increases
  • cost of repair cost of labor cost of material
  • The related metric is

19
Maintenance mean time to repair
  • The average active maintenance time to perform
    corrective maintenance
  • It depends on the type and frequency of failures

20
Vendor selection of good parts
  • Measure of the reliability of the supply in terms
    of the quality of the delivered parts
  • If not 100 it leads to shortage of parts and
    additional costs (reverse logistics)

21
External/Customers
  • Customer service has 3 dimensions
  • Quality (Number of good parts sold, of
    shipments delivered on time,)
  • Time (Leadtime)
  • Cost (unit cost of providing a service)
  • Metrics
  • Service reliability
  • Customer complaints

22
External/Government
  • Governments tend to measure industry performance
    based on
  • Number of new jobs created
  • Revenues from taxes
  • New infrastructures development
  • Impact on other industries
  • They also evaluate negative aspects such as
  • Pollution
  • Congestion
  • Crimes

23
External/Investors
  • View in monetary terms of the company
    performances
  • Metrics

24
How to design the metrics?
  • Define the system that has to be measured and its
    components
  • Determine the functional requirements or
    expectations of the system
  • Identify metrics that can quantitatively measure
    the functional requirements
  • Make sure to understand the relationship between
    metrics!

25
Issues in logistics metrics
  • Simple and easy to understand in terms of
    measuring, calculating and interpreting
  • Measurement units
  • Data availability
  • Reporting on measures (charts or graph, trend
    analysis)
  • Quality of measures (perceived accuracy,
    actionability, and internal comparability and
    compatibility )
  • Understanding the drivers of the performance

26
How to measure the metrics?
  • Manually
  • Data collection by means of paper forms
  • Time measurement of logistics processes
  • Financial documents analysis
  • Automated
  • Information System (ERP, DB analysis)
  • Communication Technology (TrackingTracing)
  • Dedicated software (Cockpit of Key Performance
    Indicators, KPI)

27
Costi di distribuzione e controllo delle
prestazioni in unazienda di trasporto
  • Esempio di definizione di un sistema di misura
    delle prestazioni in un caso reale

28
Struttura dei costi del trasporto
29
Il costo di trasporto è influenzato da
  • geografia del territorio
  • tipologia del prodotto trasportato
  • economie di scala
  • consumi energetici
  • dotazione infrastrutturale
  • modalità di trasporto utilizzate per effettuare
    la spedizione
  • concorrenza e regimi di regolazione.

30
Metodologia di calcolo
  • Analisi delle attività
  • Suddivisione dei costi tra fissi e variabili
  • Riconduzione dei costi alle varie attività
  • Calcolo dei costi

31
Suddivisione dei costi
  • Costi fissi
  • Costo del personale
  • Assicurazioni
  • Licenze di trasporto
  • Ammortamento mezzi
  • Affitto parcheggio.
  • Costi variabili
  • Costo del carburante
  • Costi amministrativi
  • Straordinario personale
  • Costo pneumatici
  • Failure
  • Costo lubrificanti.

32
Riconduzione dei costi alle attività
  • Si calcolano sulla base dei dati storici
    dellazienda i costi unitari medi (per km / al
    giorno)
  • Si ripartiscono i costi in di incidenza sulle
    attività aziendali

33
Esempio di riepilogo costi
Carburante 47,65 1.191,18
Pneumatici 5,13 128,25
Lubrificanti 0,90 22,50
Failure 8,00 200,00
Personale 132,00 3.300,00
Amministrativi 13,63 340,63
Ammortamento 72,22 1.805,56
Parcheggio 2,60 65,00
Assicurazioni 12,83 320,83
Licenze 1,67 41,67
TOTALE 296,62 (giorno) 7.415,61 (mese)
34
Esempio dati per calcolo indicatori
35
Esempio dati per calcolo indicatori
Fresco e scatolame sono i tipi di servizio di
distribuzione
36
Cruscotto indicatori
37
Questioni
  • Come fa lazienda a misurare gli indicatori visti
    in precedenza?
  • In che modo lazienda può usare gli indicatori
    per migliorarsi?
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