Supply Chain Logistics Management

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Supply Chain Logistics Management
Operational, Financial Social Performance
Measurement
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• High Performance Logistics Activities Supply
  Chain Management Require Good Measurement Systems

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Monitoring
• Controlling
• Directing
• Shareholder Value
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance

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Abandoned Bobsled Course from 1984 Olympics in
Sarajevo
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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Logistics Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Logistics Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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Functional Logistics Performance Measurements
Cost Performance Measurements Cost Performance Measurements Cost Performance Measurements Cost Performance Measurements
Total Dollars Spent for Total Dollars Spent for Total Dollars Spent for Total Dollars Spent for
Warehousing Outbound Transportation Inbound Transportation Order Processing
Percentage of Sales Spent for Percentage of Sales Spent for Percentage of Sales Spent for Percentage of Sales Spent for
Warehousing Outbound Transportation Inbound Transportation Order Processing
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Functional Logistics Performance Measurements
Customer Service Performance Measurements
Item Fill Rate
Number of Items Delivered to Customer Number of Items Ordered by Customer
Order Fill Rate
Number of Orders Delivered Complete Number Customer Orders
Average Order Cycle Time Average of Days Between Receiving Delivering Customer Orders
Order Cycle Consistency Amount of Variation in Order Cycle Times
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Functional Logistics Performance Measurements
Logistics Quality Performance Measurements
Order Picking Accuracy
Percentage of Damage Items
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Functional Logistics Performance Measurements
Labor Productivity Performance Measurements Labor Productivity Performance Measurements Labor Productivity Performance Measurements Labor Productivity Performance Measurements
Transportation Labor Productivity Transportation Labor Productivity Transportation Labor Productivity Transportation Labor Productivity
Items TransportedEmployee Items TransportedEmployee Items Transported Labor Hour Items Transported Labor Dollars Spent
Warehouse Labor Productivity Warehouse Labor Productivity Warehouse Labor Productivity Warehouse Labor Productivity
Items ReceivedEmployee Items Stored Labor Hour Items Stored Labor Hour Items Picked Labor Dollars Spent
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Functional Logistics Performance Measurements
Asset Management Performance Measurements Asset Management Performance Measurements
Capacity Utilization Capacity Utilization
of Cases Warehouse Actually Ships of Cases Warehouse Can Ship of Hours Equipment is Not Used (Downtime)
Inventory Turnover Rate Inventory Turnover Rate
Cost of Goods Sold Average Inventory Value Cost of Goods Sold Average Inventory Value
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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Perfect Orders
• Absolute Performance
• Customer Satisfaction
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Perfect Orders
• Absolute Performance
• Customer Satisfaction
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Perfect Orders
• Absolute Performance
• Customer Satisfaction
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Perfect Orders
• Absolute Performance
• Customer Satisfaction
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Supply Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Supply Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Supply Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Supply Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Supply Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Supply Cash to Cash Conversion
• Inventory Days of Supply
• Dwell Time
• Chain Total Cost
• Supply Chain Response Time
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Functional Performance
• Customer Accommodation Performance
• Integrated Supply Chain Performance
• Benchmarking
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Cost-Revenue Analysis
• Strategic Profit Model (SPM)
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Cost-Revenue Analysis
• Public Accounting Practice
• Activity Based Costing
• Strategic Profit Model (SPM)
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Cost-Revenue Analysis
• Public Accounting Practice
• Activity Based Costing
• Strategic Profit Model (SPM)
• Social Issues in Logistics Performance

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Cost-Revenue Analysis
• Public Accounting Practice
• Activity Based Costing
• Strategic Profit Model (SPM)
• Social Issues in Logistics Performance

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Hospital (15 locations) Retailer (200 locations) TOTAL
Revenue from Customers (cost of goods sold for customers) 140,000 150,000 290,000
Less Cost of Order Processing 6,400 1,600 8,000

Less Cost of Transportation 6,000 3,000 9,000
Less Cost of Delivery 9,600 2,000 11,600
Net Contribution 118,000 143,400 261,400
Total Revenues (Cost of Goods Sold to Customers)
290,000 Hospital purchases 35,000 each year
for 4.00 each 140,000 Retailer purchases
50,000 each year for 3.00 each 150,000
Total Cost of Transportation 9,000 Hospital
15 locations 5.00/order 80 orders/year
6,000 Retailer 200 locations .75/order 20
orders/year 3,000
Total Cost of Order Processing 8000 (Hospital
places 80 orders per year) 80 of 8000
6,400 (Retailer places 20 orders per year) 20
of 8000 1,600
Total Cost of Delivery 11,600 Hospital 15
locations 8.00/order 80 orders/year
9,600 Retailer 200 locations .50/order 20
orders/year 2,000
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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Cost-Revenue Analysis
• Strategic Profit Model (SPM)
• Social Issues in Logistics Performance

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Price
SALES
x
2000
Strategic Profit Model
Quantity
GROSS MARGIN
-
500
(BASE CASE)
COST OF GOODS SOLD
Cost of goods
1500
x
NET PROFIT
-
Quantity
100
DIRECT EXPENSE
NET PROFIT MARGIN
Transportation Handling Storage Space Promotion

300
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TOTAL EXPENSES
NET SALES

400
2000
net profitnet sales
(
)
INDIRECT EXPENSE
100
RETURN ON ASSETS
10
INVENTORY
NET SALES
400
2000

ASSET TURNOVER
CURRENT ASSETS
ACCOUNTS RECEIVABLE

2
100
600
TOTAL ASSETS


net salestotal assets
)
(
1000
OTHER CURRENT ASSETS
FIXED ASSETS
100
400
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Price
SALES
x
2000
Strategic Profit Model
Quantity
GROSS MARGIN
-
500
(INVENTORY REDUCTION)
COST OF GOODS SOLD
Cost of goods
1500
x
NET PROFIT
-
Quantity
120
DIRECT EXPENSE
NET PROFIT MARGIN
Transportation Handling Storage Space Promotion

280
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TOTAL EXPENSES
NET SALES

380
2000
net profitnet sales
(
)
INDIRECT EXPENSE
100
RETURN ON ASSETS
13.32
INVENTORY
NET SALES
300
2000

ASSET TURNOVER
CURRENT ASSETS
ACCOUNTS RECEIVABLE

2.22
100
500
TOTAL ASSETS


net salestotal assets
)
(
900
OTHER CURRENT ASSETS
FIXED ASSETS
100
400
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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance (SOX)

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• Measurement System Objectives
• Operational Assessment
• Financial Assessment
• Social Issues in Logistics Performance (SOX)
• Requirements for Internal Controls
• Supply Chain Security