Service level indicators are a practical way of visualizing the effectiveness of your logistics operation from the customer's point of view. Basically it should reveal how much of your internal inefficiencies were perceived in the form of delays and incomplete deliveries. However, there are several limitations and difficulties in monitoring these indicators, something previously explored by Thatiana, such as the lack of visibility of the arrival date and state of the cargo upon delivery.
First, the manager responsible for monitoring these indicators must keep in mind the limitations of information available to him. Ideally, a service level indicator should capture the customer's overall perception of delivery quality, but this perfect capture is closely tied to extra costs. Knowing whether the cargo arrived at the customer's facility on the scheduled date and time requires investments in GPS fleet tracking and/or real-time monitoring systems, something that is not always within the company's financial reach. Therefore, in these cases, monitoring the date and time of departure from your own facility is the only way to measure the level of service, although it is inaccurate due to possible fluctuations in transit time.
Other definition difficulties at the service level relate to internal definitions. For example, if an order is incompletely fulfilled, does it receive a score of 0% or the proportionality of the fulfillment (95%, if this is the total number of items in the order actually loaded)? In this case, the first definition will certainly generate a more conservative service level and possibly lower than the customer's perception, while the second method may generate a more optimistic indicator than reality. Another example of an internal definition is the due date. These deadlines are often renegotiated during the execution of the order for various reasons, whether due to internal factory limitations or the customer's own request. And then the question arises: for the purposes of monitoring the level of service, do you consider the original negotiation or the adjusted one? Similarly, this definition can generate more conservative or optimistic indicators.
And does your company have all the standardized information for monitoring service level indicators? The fact is, performing service level indicator monitoring may not be as simple as it sounds.
References:
https://ilos.com.br/web/erros-comuns-na-definicao-de-kpis/
http://www.scdigest.com/experts/DrWatson_17-04-18.php?cid=12267
