# Assessment of the level of logistics services - Logistics

## Assessing the level of logistics services

The main criterion for assessing the service system from the supplier's point of view and from the position of the service recipient is the level of logistics services.

The calculation of this indicator is carried out according to the following formula:

where η is the level of logistics services; т - quantitative estimation of actually rendered volume of logistical service; M - a quantitative estimate of the theoretically possible volume of the logistics service.

To assess the level of logistics services, the most important types of services are selected, i.e. services, which are costly. At the same time, the lack of services leads to significant losses in the market.

Practically the level of service η can be calculated as an index, i.e. the ratio of the actual number of goods available in the process to the number of the maximum possible number of goods presented to the consumer in terms of delivery and provided with appropriate service support.

The service level can also be assessed by a time criterion. Comparing the total time for the actual delivery of logistic services actually delivered during the delivery with the total time that would have to be spent in the case of the entire range of possible services in the same delivery process, it is possible to assess the level of services. The calculation is carried out according to the following formula:

where N is the number of services that can theoretically be rendered; n - actual number of services provided; t i is the time to perform the i -th service; - the total time spent on rendering actual services; - the total time that can theoretically be spent on the performance of the entire range of possible services.

Practice has shown that the dependence of costs on the service on the value of the level of service varies exponentially with the ratio

where Zobsl - the cost of service; e is the base of natural logarithms, it is -2.7; η is the service level (Figure 7.2).

Fig. 7.2. Schedule of service cost versus service level

Thus, starting from 70% or more, the service costs grow exponentially depending on the level of service, and at a service level of 90% or higher, the service becomes unprofitable. Experts calculated that with an increase in the level of service from 95 to 97%, the economic effect is increased by 2%, and costs increase by 14%.

On the other hand, a decrease in the level of service leads to an increase in losses caused by a deterioration in the quality of the service. This relationship can also be represented by a graph of the dependence of losses with a decrease in the quality of service from the level of service η.

The growth of the company's competitiveness, caused by the growth of the level of service, is accompanied, on the one hand, by an increase in the costs of the service, and on the other hand, by a reduction in losses in the market. The task of the logistics service is to find the optimal value of the service level η.

The optimal size of the service level can be determined by constructing the summary curve F3, reflecting the cost behavior, maintenance (function F1) and the loss of F2 from the decrease in the quality of service, depending on the change in the level of service (Figure 7.3).

Graphs of the dependence of costs, as well as their total values ​​(curve F3) F1 and F2 for reducing the quality of service from the service level ">

Fig. 7.3. Graphs of the relationship between costs, as well as their total values ​​(curve F 3 ) F 1 and F 2 reducing service quality from service level

Quality of service is of great importance in modern logistics service. This concept extends to all types of service and is universal.

So, for the evaluation of the quality of logistics services, the following criteria are applied:

- reliability of delivery;

- the total time from the receipt of an order to the delivery of a consignment of goods;

- supply flexibility;

- availability of stock at the supplier's warehouse;

- the ability to provide loans, as well as a number of other criteria.

Let's characterize the first of the three named criteria.

Reliability of delivery. In general, reliability means a complex property of the system, consisting in its ability to perform specified functions, keeping its characteristics within the established limits. Reliability of supply as a criterion of service quality is the ability of the supplier without failures and failures to comply with the terms and delivery rates stipulated by the contract within the established limits. Reliability of delivery is determined by the reliability of meeting the deadlines for performing certain types of work, which includes the delivery process. An essential factor affecting the reliability of delivery is the availability of the obligations (guarantees) stipulated in the contract, by virtue of which the supplier is liable in case of violation of the terms and volumes of delivery.

The total time from the receipt of an order to the delivery of a consignment of goods represents the life cycle of the supply and includes:

- the time of ordering;

- the manufacturing time (this time is added to the delivery date if the ordered goods must first be manufactured);

- packing time;

- shipping time;

- delivery time;

- the time of delivery to the consumer.

Compliance with the delivery time specified in the contract depends on how accurately the above components of this period are maintained. For example, it may happen that the received order will lie without moving. The planned terms of manufacturing the goods or the terms of transportation declared by the freight forwarder may not be observed.

Flexibility of supply as a criterion of service quality means the ability of the supplying system to take into account the special provisions (or wishes) of customers. This includes:

- the ability to change the order form;

- the ability to change the way the order is transferred;

- the ability to change the type of packaging and packaging;

- possibility of withdrawal of the purchase requisition;

- the ability of the client to receive information about the status of his order;

- the attitude to complaints with incomplete supplies, etc.

The ratio of the significance of individual criteria may vary depending on the factors. Therefore, the choice of quality of service criteria requires modern approaches to their evaluation. One of them is carrying out of simulation modeling at a choice of criteria. For example, in the context of a deficit of payment means in the United States, the provision of loans is of great importance. At the same time, in countries with developed market economies, the most significant indicator of the quality of service is the reliability of supply. But we must take into account the costs and losses from reducing the quality of service. The graph of the depen- dence of the losses from the decrease in the quality of service as a result of the level of service is shown in Fig. 7.4.

Fig. 7.4. The graph of loss versus service quality decrease from the level of service level

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