The Logistics function is made up of people, processes and systems working together to effectively and efficiently support delivery of services to customers.
Key Performance Indicators (KPIs) are a type of performance measurement. They evaluate the successes of an organisation or particular activities. Success is often measured as the repeated achievement of some operational goal (e.g. zero defects, on-time deliveries) or, alternatively, in terms of the progress made towards strategic goals of the organisation.
Some of the key performance measures in logistics transportation activities would include;
- On-time delivery;
- Delivery of exact specification requested;
- Reliable transport services.
Performance measures used to monitor and evaluate logistics activities would include:
- Order status information;
- Technical support;
- Stock availability;
- Document quality;
- Quality of items;
- Damage in transit;
- Treatment of claims (response time).
- Performance measures can provide the foundation for informed decision-making however, improper performance measures can distort the conclusions and impact adversely on efficiency by disguising critical issues and warning signs.
Good performance measures have several distinguishing characteristics;
- They are directly related to objectives and strategies and must be understandable but not under-determining;
- They must be meaningful and provide feedback;
- They vary between locations and customer segments;
- They provide feedback quickly.