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KPI Logistics in The Supply Chain

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									                                             Presented by Daniel Toriola


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                                              KPI Logistics In The Supply Chain
                                                             By Sam Miller



    KPI logistics or key performance indicator logistics involves certain metrics that are typical in the
logistics industry. These metrics include cost and time, as well as the risks. There are complexities
involved in the transactions made with different parties.

Cost and time are two elements typical in logistics operation. For a logistics business to be competitive,
it must have the knowledge of the time of transit in certain locations. Time is of the essence in logistics
business. Delay in delivery translates to inefficiency in the operation. The delay can also be costly.

The indicators that can come with logistics in relation to time include: the average time to complete a
typical shipping transaction; the time to finish filing documents; the time to deal with customs; the
average time to process a shipping transaction; the total tine for shipping procedures and trade-related
processes; and the percentage of on-time delivery.

The longer the time of the delivery, the more costly the transaction and operation would be. Cost is
inherent in many businesses. For a logistics business to be competitive, it must minimize cost as much
as possible. It must create shipping procedures that are quantifiable and that must be within the level
of budget.

Indicators to measure the performance of the logistics business in relation to cost include: cost per
case, transportation cost, fuel cost, warehousing cost, total cost for sipping-related procedures, inland
freight cost, and average cost in processing typical shipping transactions.

Cost against risks can be an indicator. Because of the ever-existence of risks in shipping products, it is
reasonable for a logistics company to integrate insurance cost in its shipping price offer.

There are certain risks that come in shipping goods by sea or on air. Risks, such as calamities,
temporary shutdowns of ports, delay in transit time, and canceled transit can be seen as challenges of
the logistics management. To make the operation of shipping efficient and effective as much as
possible, the management must come up with performance dynamics and develop strategies to
resolve or counter problems and expected circumstances in shipping. Effective procedures in shipping
must be drawn while contingency cost may have to be allocated to prepare for the risks, either God-will
or manmade forces.


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                                                                                                                          Page 1
                                             Presented by Daniel Toriola


KPI's in logistics can help management identify and sort out problems during its normal operation.
These measurements can be seen as factors for the improvement of the operation in the supply chain.
Upon seeing unfavourable results in the metrics, logistics can find the aspects that need improvement
and can identify the areas where the business is strong. Using the metrics, logistics management can
draw up solutions or plan to enhance its performance and to make the management more effective in
carrying out the objectives of the organization.

KPI logistics is a crucial tool in assessing the progress of logistics business. It can also be a means to
indicate the efficiency and effectiveness of the different levels of management. Logistics management
that provides effectiveness in the operation leads the organization to its success. Mismanagement at
one point of the supply chain can lead to costly transactions that can eat up profits, thereby
jeopardizing the position of the logistics business in the supply chain.

If you are interested in KPI logistics, check this web-site to learn more about scorecard logistics.
http://www.logistics-management-kpi.com




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                                   Presented by Daniel Toriola


                                   The Essence Behind Logistics KPI
                                              By Sam Miller



 Supply chain metrics are very essential when you want to manage everything that goes through the
supply chain from top to bottom. More importantly, supply chain metrics are very, very important when
it comes to logistics management. By understanding the intertwined roles of both supply chain metrics
and logistics KPI, any business's logistics operations would then be successful.

For the most part, supply chain metrics actually include fill rate, cycle time, inventory turns, and DPMO.
These forms of measures are actually used to monitor the supply chain's very performance.
Furthermore, these measures can also assist you in fully understanding the operations of your
company for a certain period of time.

There are also other supply chain metrics that are worth mentioning, and these include customer
service, inventory, production, procurement, distribution, warehousing, and transportation. All of these
aspects comprise what is known as logistics operations. To ensure success in this aspect, you have to
understand that companies should go beyond being successful in just one particular area of the whole
supply chain. The nature of supply chain in logistics can be very volatile. Thus, for the logistics supply
chain to be sustainable, each and every key area has to be measured accurately.

It is also very important to keep track of your metrics so that you can efficiently monitor company
performance during a certain time period. The benefits of doing such can give you apt guidance for the
purpose of supply chain optimization. When you track these metrics, you can then spot any sort of
problem, especially in the management area. You can even do this before the problem manifests itself.
What's more, your performance can then be compared with that of other companies via industry
benchmarking.

Supply chain metrics and logistics KPI may be the ideal solutions when you want to determine the
weak points that your company should improve on. However, these are not final steps in the process
for you would still need to implement the appropriate corrective actions to deal with these weak points.
With the adoption and implementation of these corrective actions, the logistics measures of your
company will indeed enjoy significant improvement.

Another important thing you have to remember about logistics KPI and supply chain metrics is the fact
that they can vary from one company to another. These forms of measures are developed in
accordance with the company's goals and objectives. And there virtually are no two companies that
have the same sets of goals and objectives. Thus, the logistics KPI and supply chain metrics that they
have implemented in their system would understandably differ as well. So, what can you do to
effectively choose relevant metrics to use for your company? First of all, you should understand the
logic behind metrics. Understand the very essence of their existence. Secondly, you should also
understand just how all of these metrics work. Determine the factors that keep these metrics in motion
so that you can understand where your results are coming from. Thirdly, identify the weak points in all
the processes your company undergoes. From these weak areas, you can then incorporate goals and
objectives to effectively handle these areas that need improvement. The corrective actions can then be
implemented, and the results can be duly monitored.

If you are interested in logistics kpi, check this web-site to learn more about logistics metric.



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                              Presented by Daniel Toriola


http://www.logistics-management-kpi.com




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                                   Presented by Daniel Toriola




Related eBooks:

The Essence Behind Logistics KPI
Inventory Kpi In The Aviation Industry
Supply Chain Scorecards As Performance Metrics For Logistic Network
Breaking Down The Importance Of Logistic KPI’s?
Kpi Start-up - Learn How To Design, Fill With Data And Use Key Performance Indicators

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