Team 2_03 Chap 5

We have evolved from measuring functional cost to

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Unformatted text preview: etermining efficiency. We have evolved from measuring functional cost to total logistics cost. The relevant point of measurement has changed from totally internal to a firm to the collective costs of many firms involved in the supply chain Performance Metrics Categories (Scheme 1) 4 Major Categories: (Refer to Figure 5.4 on pg. 146) 1. Time 2. Quality 3. Cost 4. Supporting Metrics Time ◦ Important indicator in measuring effectiveness ◦ 2 Elements of Time: The elapsed time for the activity The reliability (variability) for the activity ◦ EX: A cycle may take 10 days, plus or minus 2 days or it could take 10 days, plus or minus 6 days. Absolute length is the same but they have a different variability. Metrics should measure both absolute time and variability Quality ◦ Overall customer satisfaction ◦ Processing accuracy ◦ Perfect order fulfillment On-time delivery Complete order Accurate product selection Damage-free Accurate invoice ◦ Forecast Accuracy ◦ Planning Accuracy Budgets and operating Cost ◦ Important indicator in measuring efficiency ◦ Total Delivered Cost: • • ◦ Includes the cost of goods, transportation, inventory carrying costs, import/export costs, and warehousing Inventory Turns • ◦ Multidimensional How long an organization hold inventory and its resulting impact on inventory carrying cost Day Sales Outstanding • Impacts service levels to customers and can affect the rate of order fill Supporting Metrics Approval exceptions to standard • • Minimum order quantity Change order timing Availability of information Measuring the Performance of Process (Scheme 2) Reliability ◦ Delivering the correct product, to the correct place, at the correct time, in the correct condition and packaging, in the correct quantity, with the correct documentation, to the correct customer Responsiveness ◦ The speed at which the supply chain provides products to the customer Flexibility Measuring the Performance of Process (Scheme 3) Logistics ◦ transportation Logistics ◦ operations costs service metrics 5 categories (fi...
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This document was uploaded on 02/14/2014 for the course MKT 3359 at Texas Tech.

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