Methods for calculating indicators, Choice of standard...

Methods for calculating indicators

Methods of calculating indicators depend on the type of indicators. There are several kinds of indicators:

• absolute (measured in natural or value units). For example, results, costs, turnover. These indicators are insufficiently informative and require for comparison any data, for example, on the activities of competitors or historical figures;

• Relative. These metrics are used in comparison to others, but are themselves informative. Relative indicators are coefficients - partial values ​​with respect to the aggregate value. For example, the relative index is the proportion of ideally executed orders (perfect order):

• calculated numbers - are the ratios of the values ​​of different levels. For example, the effectiveness of each employee:

• Index values ​​- are measures of changes that occur over time. With the help of indices, it is possible to compare the growth of indicators (the increase in transportation costs with the overall growth of logistics costs or with a general increase in prices). For example, the growth index of purchasing costs:

Selecting the KPI standard

Choosing indicators for the evaluation of logistics, you need to determine the standards (target values) for each indicator. "Performance indicators do not interest us in themselves, but only serve as a tool to help managers make decisions regarding the supply chain." Therefore, the choice of the standard depends on the management objectives.

To determine the target values ​​of indicators can be used:

• current values ​​of indicators or data of past periods;

• results of benchmarking studies (intra-firm and inter-firm),

• results of a survey of consumers, employees using the method of expert assessments.

Practice questions

The International Supply Chain Council, which recommended the SCOR model, recognized today as an international cross-industry standard for planning, controlling and, in general, in supply chain management, proposed performance indicators for the first level of the model, i.e. Measuring instruments that generalize a number of logistical processes. These indicators are presented in Table. 9.11.

Table 9.11. Supply chain performance parameters and first-level indicators SCOR - models

Logistics operation attribute

Defining Performance Attributes

KPI (Basic)

1.Precise of delivery in the supply chain

The functioning of the sales center when delivering: the right product - in the right place - at the specified time - in the required state and packaging - of the specified quality and quantity - with properly documented documents

Executing delivery schedules

Customer Satisfaction Ratio

Customer satisfaction from the perfect order

2. The speed of reaction in the value of supply

The speed at which logistics delivers goods to consumers

Order Execution Time

Duration of individual logistics cycles

3. Productivity/Resource efficiency of logistics infrastructure

The ability of elements of transport, warehouse and information infrastructure of logistics to provide customer needs and competitive advantages

Productivity of warehouse handling equipment and process equipment

Productivity of vehicles

Information system performance/throughput

4. Costs in the supply chain

Costs associated with logistics operations in the supply chain

Total Cost of Sales

Total Cost of Supply Chain Management

Resource efficiency from the value added position

Return/Waste Management Costs

5. The effectiveness of logistics asset management in the supply chain

The effectiveness of logistics in asset management to meet demand. Includes management of the main (enclosed in the logistics infrastructure) and working capital

Cash cycle time

Inventory in days of delivery

The number of asset revolutions

In order to position the value of supplies in a competitive business environment and to implement strategic controlling of logistics business processes by the BSOI-Council of the Council for Supply Chain for the indicators shown in Table. 9.10, a strategic map of the gaps was developed. It is shown in Fig. 9.4.

Based on the results of the comparison, the KRI breaks are defined, which serve as the basis for making strategic decisions to improve logistics in the supply chain.

thematic pictures

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