According to CSCMP (Council of Supply Chain Management Professionals), logistics management is the process of planning, implementing and controlling the flow and storage of goods, servicesçand inform themtionis from the point of origin até the point of consumption with the propóto meet the needs of the customer.
Those who work in the segment already know this definition in some way, whether through studies or day-to-day practice. But how do you know if logistics management is being well implemented? According to the Supply Chain Operations Reference (SCOR Model), performance measures can be used to measure the ability of the supply chain to achieve strategic objectives and these objectives can be classified into 5 attributes.
- Reliability: ability to perform tasks as expected
It is the delivery capacity of the supply chain focusing on the result of the process. Typical indicators of this attribute are: the right product, in the right place, at the right time, in the right quantity, in perfect condition, with the right documentation, for the right customer.
- Velocity: speed with which activities are performed
It is the speed at which the supply chain delivers the product to the customer. Typical indicators for this attribute measure cycle times such as lead time and order fulfillment time.
- Flexibility: ability to adapt to external influences
It is the ability to respond to market changes to maintain or gain competitive advantage over the competition. The indicators of this attribute measure the ability to change the plan.
- Costs: cost of running the logistics process
It is the sum of all costs involved in the supply chain, such as labor, material, management, transport, storage, etc. A typical indicator of this attribute is the cost of goods sold.
- efficiencyênce: Ability to use assets efficiently
It is how much result is achieved with the fixed or fixed assets available. Some indicators of this attribute are productivity, inventory days, return on capital, etc.
Figure 1: Supply Chain performance attributes
Source: ISCOR Model, adapted by ILOS
Note that the first three attributes are related to (external) customer service, while the last two are focused on the company's internal objectives. And each of them pursues a part of supply chain management objectives. This is a good template to rank your metrics and better understand your company's strategy. Is your strategic bias more towards the external side (customer and market) or the internal side of your company (cost and efficiency)?
Figure 2: CHALLENGE: How would you rate the following indicators on the 5 attributes
(Reliability, Speed, Flexibility, Costs and Efficiency)?
Source: ILOS
References:
https://ilos.com.br/web/scor-model-uma-breve-introducao/
http://www.apics.org/sites/apics-supply-chain-council/frameworks
Beatris Huber
https://ilos.com.brManaging Partner of ILOS, Master in Business Administration from COPPEAD/UFRJ with extension at the European Business School – EBS, Germany and Business Administration from UFRJ. More than 10 years of experience in training and consulting projects, focusing on Logistics and Supply Chain. In the training area, he developed company games and online courses and today teaches classes in Data Analysis, Inventory Management, Warehousing Management, in addition to applying business games such as Beer Game in open and in-company programs in companies from different segments, such as Coca -Cola, Nestlé, ThyssenKrupp, Votorantim, Carrefour, Mallinkrodt, Souza Cruz, Via Varejo, Monsanto, Itaú, Renner, Ipiranga, among others. In consultancy, he carried out projects such as Redefinition of the Logistics Network, Inventory Management, S&OP Process Structuring and Diagnosis of Storage and Transport Operations in companies such as Coca-Cola, Souza Cruz, Editora Moderna, Petrobras, Ducoco, Ultragaz, Silimed, Eudora among others.
