Logistics Management: Iasuring Logistics Performance: Measurement Techniques

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Transport and Logistics Module: Strategic Logistics Management Lecturer: Patrick Pirkl Topic: Measuring Logistics Performance (Measurement Techniques) By Daniel Murphy C10380791 DT358/4 Introduction To effectively evaluate a company's logistics performance four main methods of analysis are used. These are : The Balanced Scorecard The Supply Chain Measurement system Inventory and Warehouse Performance metrics Costs within Logistics The Balanced Scorecard Background Art Schneiderman originally came up with the balanced scorecard concept but it was Dr. Robert S. Kaplan and David P. Norton who actually took on the job of writing papers and books on the subject spreading knowledge of its practical uses. From this they became known as the…show more content…
The balanced scorecard entails assessing the supply chain under four perspectives: 1. Internal business process perspective "Internal business processes refer to the way operations are carried out within the company, which enable customer satisfaction to be achieved"(Cousins , Lamming, Lawson , & Squire, 2008). This perspective can be analysed through waste analysis, corporate strategy alignment and cycle time assessment. There are various improvements which include waste reduction and improved response time. 2. Customer perspective "Customer focus is essential to understanding how customers view the business, because without customers, no organisation can create value"(Cousins et al, 2008). In order to analyse this area it's best to look at your customer service and the number of complaints you may be receiving with regards to the logistics of your product and its lead time and quality. Benefits from thorough assessment can include customer value creation (by listening to what your customer wants) and an improved lead…show more content…
All costs are accounted for with fixed prices agreed for additional services if needed and then a profit margin is added onto the contract. The main advantage of this model is that both parties are able to see how they both work. A big disadvantage is that it does not work efficiently with seasonal based demands as its costs will fluctuate a lot and parties will may run out of resources to meet requirements of the demand. Transactional pricing This pricing models involves having a fixed rate for all resources on a unit or activity basis. Overheads are usually already included in these rates. This drives the provider to constantly look for any savings that can be made. This can also be a useful model for customers as they do not have to pay for resources when not required. It can become a tough model to tweak if customers would like special services and as a result a base level of service should be decided on to match the fixed

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