Journal of Manufacturing Technology Management

Logistic service measurement: a reference framework

Carlo Rafele
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Carlo Rafele, (2004),"Logistic service measurement: a reference framework", Journal of Manufacturing Technology
Management, Vol. 15 Iss 3 pp. 280 - 290
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Garland Chow, Trevor D. Heaver, Lennart E. Henriksson, (1994),"Logistics Performance: Definition and Measurement",
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Logistic service
measurement: a
reference framework
Carlo Rafele
Downloaded by WEIZMANN INSTITUTE OF SCIENCE At 05:49 30 January 2016 (PT)
The author
Carlo Rafele is Assistant Professor in the Department of
Production Systems and Business Economics, Politecnico di
Torino, Turin, Italy.
Keywords
Supply chain management, Logistics management,
Performance measurement (quality),
Service quality assurance, Customer service management
Abstract
Many companies measure their logistic performances using
several methods. As a consequence, various sets of
indicators can be found in practice and in the literature. In
particular, the same event can be measured in different
ways, so that the relative performance is sometimes totally
different. The purpose of this paper is to suggest a hierarchy
in logistic performance measurements. A referring model for
evaluating the logistic performances is also proposed in this
paper, together with the definition of a reference framework
for the selection of supply chain performance measurements.
Electronic access
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . pp. 280-290
# Emerald Group Publishing Limited . ISSN 1741-038X
DOI 10.1108/17410380410523506
280
Introduction
Over the last half century, the role of logistics in
business has increased in both scope and
strategic importance. Logistic strategies have
influenced customer selection, product design,
partnership/alliance building, vendor selection
and many other core business processes
(Caplice and Sheffi, 1995). Moreover, logistics
has given a strong impulse in the organised
systems developed by the supply chain in which
logistics is one of the fundamental elements.
According to the definition of logistics declared
by the Council of Logistics Management in
1998, logistics is:
. . . a part of the supply chain process that plans,
implements, and controls efficient, effective flow
and storage of goods, services, and related
information from the point of origin to the point of
consumption in order to meet customers'
requirements (CLM, 1998).
Then, logistics is part of the larger integrated
process, called supply chain, in which a number
of various business entities (i.e. suppliers,
manufacturers, distributors and retailers) work
together for acquiring raw materials, converting
them into specified final products, which in
turn have to be delivered to retailers (Beamon,
1996).
Unfortunately, the performance
measurement systems have neither kept up with
the changing role and scope of the supply chain
nor systematically examined and evaluated this
global process. Nowadays, the organisations are
competing in complex environments, and an
accurate understanding of their goals and of the
methods for attaining them is therefore essential
(Kaplan and Norton, 1996). Performance
measurement systems should evaluate both the
individual metric and system-wide level in order
to maintain relevance and effectiveness
(Caplice and Sheffi, 1995).
In the past years, attention was mainly
devoted to the performance of the single
process inside the supply chain. Recently,
however, there has been more concern
on the performances of the global supply
chain itself (Beamon, 1996). The difficulty
Received: September 2001
Revised: June 2002
Accepted: July 2002
 Logistic service measurement: a reference framework
Carlo Rafele
of developing appropriate performance
measures concerns the kind of evaluations
(qualitative or quantitative) and the
objects (single organisations or many, one
product line or many, and so on) (Beamon,
1999).
Considering the supply chain as a whole, a
measurement system should be more than a
disparate assortment of individual metrics. It
has to be valid, robust, useful, integrative,
economical, compatible, with a correct level of
detail, and behaviourally sound (Caplice and
Sheffi, 1994; Rafele and Frizziero, 1996).
Keegan et al. (1989) note that for most
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companies:
. . . the problem is that there are too
many performance measures ± too many that
are obsolete and too many that are not
consistent.
While performance measures will readily
accumulate, they are rarely removed. It has to
be considered that inclusive performance
measures for supply chain systems may be
constructed by combining a number of
different individual performance measures
into a system or function of performance
measures. But only the performance system
resulting from the combination of individual
measures would allow a more inclusive
measure of the overall system (Beamon,
1996).
` ... A generally applicable systematic
approach to performance measurement
has not been developed yet, mainly due
to the specific measurement
characteristics required by different
systems... '
According to the literature available, a system's
efficiency and effectiveness could be
determined by a set of performance measures
or indicators. In various spheres of competence
and operative activities, different aspects of
logistic service quality management are
covered by a set of indicators. Moreover, these
measures have to be referred to a service
quality model evaluation (Parasuraman et al.,
1985, 1988).
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
Literature review
An important component in the design
of a supply chain is to obtain an effective
supply chain design, once a set of
performance measures is established
(Beamon, 1998). For this scope, a standard
measure ± called a metric ± should be defined
for assessing the organisation's ability to meet
customers' needs and/or business objectives.
Metrics can generally fall into two categories:
performance and diagnostic (Trimble, 1996).
The first measures what you are doing. The
second analyses why a process is not
performing as expected (English et al., 1999).
In our context, we are discussing a
performance metric. The set of performance
indicators is used to determine the efficiency
and/or the effectiveness of a single system, or
to compare alternative systems. The available
literature identifies several important
performance measures in the evaluation of
supply chain efficiency and effectiveness
(Beamon, 1998). Many authors have
categorised them. Neely et al. (1995) consider
four main categories: quality, time, flexibility,
and cost; while Lockamy and Cox (1994)
define customer, resource and finance as
primary categories of performance
measurements. According to Caplice and
Sheffi (1994), a good metric has to capture
the critical elements of the logistic process:
time, distance, and money. For Mendoza
there are three primary groups of performance
measures: financial, quality, and resources
(English et al., 1999). Moreover, a ``good''
logistic performance measurement system
should be comprehensive, casually oriented,
vertically integrated, horizontally integrated,
internally comparable, and useful (Caplice
and Sheffi, 1995).
As Beamon (1998) highlights, some
questions are now opened in this research
field:
. Are the existing performance measures
systems appropriate for the supply chain?
. What are the appropriate performance
measures for supply chains?
. Is there a hierarchy among the performance
indicators?
 Logistic service measurement: a reference framework
Carlo Rafele
However, a generally applicable systematic
approach to performance measurement has not
been developed yet, mainly due to the specific
measurement characteristics required by
different systems (Beamon, 1999).
The literature analysis shows that a basic
design of performance metrics is required for
monitoring the quality of logistic functions
within most organisations (English et al., 1999).
The metric should cover several sides of service
quality management (Franceschini and Rafele,
2000). According to the Parasuraman,
Zeithaml and Berry (PZB) model
(Parasuraman et al., 1985, 1988), the following
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main factors ± also called dimensions ± should
be considered:
. Tangibles (appearance of physical facilities,
equipment, personnel, and
communication).
. Reliability (ability to perform the promised
service dependably and accurately).
. Responsiveness (willingness to help
customers and provide prompt service).
. Assurance (knowledge and courtesy of
employees and their ability to convey trust
and confidence).
. Empathy (caring, individualised attention,
which the firm provides its customers)
(Franceschini and Rafele, 2000).
These are fundamental factors for the quality of
a service. A correct and comprehensive metric
of performance measurements should therefore
include them.
The PZB model is one of the best-known
models for the quality service evaluation. It is
applicable to all kinds of services, including
logistics.
The paper introduces a proposal for a supply
chain performance measurement system
according to the service quality requirements,
defining an ordered framework for the logistic
indicators. The framework should be able to
cover all the logistic activities inside the supply
process.
A measurement model
Each company develops lots of processes in
order to gain market share with its own
products or services. Every process is a mix of
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
different activities and each of them is
measurable with several indicators.
A product-oriented firm maintains several
supplier-client relationships. The overall
process is traditionally divided into sequential
tiers. For each tier of the process, a set of
suppliers and a set of clients can be found:
every supplier puts its inputs into the process;
inputs are transformed into outputs and
passed successively to clients (Lambert et al.,
1998).
The transformed product can be either a
finished product, that is sent to retailers or to
the final client, or a semi-finished product
transferred to another company that creates its
added value. Thus you cannot deal with a single
process, but with several processes that together
generate the supply chain.
Therefore, supply chain is a mix of processes,
which ties together firms from purchasing to
distribution. It is also seen as an integrated
process, wherein raw materials are
manufactured into final products and then
delivered to customers (Beamon, 1996). In this
process, numerous entities work together in
order to modify semi-manufactured products,
developing some main activities such as:
manufacturing (transformation of inputs into
outputs); warehousing (recovery of stock);
transport (satisfaction of customer request) and
others. Each of these activities can influence the
logistic performance.
` ... In order to analyse performance
measures, the logistic supply chain can be
broken down into its elementary links;
each of them includes activities for
transforming inputs into outputs... '
Two basic aspects are detected in every single
step of the chain: the first is internal to the firm,
called intra-firm aspect; the second one ties
together suppliers and clients, creating the
inter-firm aspect. Thus, it is very important to
analyse how a firm is internally organised and
managed, but it is also significant to evaluate its
behaviour in external phases.
In order to analyse performance measures,
the logistic supply chain can be broken down
into its elementary links; each of them includes
 Logistic service measurement: a reference framework
Carlo Rafele
activities for transforming inputs into outputs,
as shown in Figure 1 (European Committee for
Standardization, 2000).
Three main points should be analysed at each
step: input side for purchasing activity,
transformation for production activity, and
output side for distribution activity. Input and
output sides relate to suppliers and customers;
instead of transformation, which is internal to
the firm.
As discussed above, a very difficult issue in
logistic measurement is the deployment of an
effective performance measurement system.
The selection of what to measure and the
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relevant targets can be complex because of the
interdependence of all activities in the supply
chain. A good performance measure system is
necessary to determine the efficiency and the
effectiveness of a single productive system or to
compare competing alternative systems
(Beamon, 1996). It is a part of the ``control
cycle'' and all its elements should be
implemented to achieve a fully functional
control process.
Referring to Figure 1, our analysis is focused
on a part of the entire supply chain process; in
particular, we consider what happens to the
single N process and how it is linked to the
others in the supply chain. Also, we might
observe all the elements that can modify the
service level.
Obviously, a product-oriented firm brings up
several costs that are visible during the entire
logistic process. In fact, process has costs tied
to its physical organisation and its way of
operating, because they depend on productive
and technological choices and also on
investment strategies.
In our study, the financial measurements will
be considered in a next phase, as a consequence
of the operational performance. Of course, the
economic aspect influences the logistic
performances, since it defines the
Figure 1 Supply chain as a series of different processes
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
responsiveness of the logistic process but,
looking to the measurement definition, they
could be considered as an effect.
Traditionally, financial performance has
been the primary measure of success in most
companies but conventional financially-based
reporting systems generally do not provide all
the required information about logistics
performance (Brewer and Speh, 2000).
Indeed, a complete performance
measurement system has to consider both
engineered/operational and financial
indicators (Brewer and Speh, 2000). Each
engineered ratio leads to a particular cost.
The global consideration of the two sides of
the logistic organisation allows the firm to
find the best compromise between cost and
quality in the supplied service. That is the
reason why financial indicators have to be
related to engineered indicators, as shown in
Figure 2. In fact, it is possible to determine
sets of indicators related to company
effectiveness, efficiency, and productivity.
They could be called engineered indicators.
Measures derived from these indicators could
influence the company's financial and
economic indicators. The choices derived
from the analysis of the two groups of
indicators (engineered and financial) will
influence the future logistic performances
through the investment decisions.
Figure 2 Engineered and financial indicators
 Logistic service measurement: a reference framework
Carlo Rafele
The model deployment
We have identified the logistic process that we
intend to analyse. Now we need to define the
basic elements of the process, which represent
the main activities leading to the process
development.
To identify these ``key elements'', first we
have to answer the following question: what is
the most important scope of the logistic
process? The best answer lies in the known
definition of the ``seven right conditions'' for
the logistic service: product, quantity, time,
condition, customer, place, and cost (Shapiro
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and Heskett, 1985). Of necessity, an
evaluation of the logistic performances will
have to comprise these main components of
the service.
The following step is how to obtain a
quantitative measure of the service: first,
we have to measure the single events,
creating appropriate indicators, then we try to
express a measure of service level with
progressive aggregations of simple indicators.
Obviously, there are a lot of indicators and
their units of measurement could be quite
different.
It could be possible to define a taxonomy of
indicators, capable of representing the activities
congruent with the logistic process. In order to
create a hierarchy of indicators, basic service
elements have to be identified and aggregated in
homogeneous groups, successively named
``classes''.
We propose also to consider the main
service dimensions as defined in the PZB
model. Parasuraman et al. (1985, 1988) have
shown that in every service evaluation ± thus
also in the logistic one ± it is possible to
identify common aspects. These basic aspects
(tangible components, reliability,
responsiveness, assurance, and empathy)
need to correspond to the activities developed
for a logistic service. Adapting the PZB model
to our issue, we think that the logistic
performance classification for a
manufacturing supply chain could be
identified by three macro-classes, including
the main activities of logistic process
(Figure 3):
(1) tangible components (corresponding to
tangible in the PZB model), which
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
concerns means and resources applied for
the service realization;
(2) ways of fulfilment (the class comprises the
expressions of reliability and responsiveness
in the PZB model); this class includes all
manners and significant parameters of
carrying out the service; and
(3) informative actions (putting together the
empathy and the assurance expressions of
the PZB model) adds to the model the
communications with the customers about
the developing of service activities.
Adapting again the PZB model, the first two
macro-classes ± tangible components and ways
of fulfilment ± contribute to define the supplied
service, since they have relations with the
physical or organising activities necessary for
carrying out the service. The third class ±
informative actions ± contributes to link
supplier and client with an information flow.
This class completes the first two classes on the
side of communication with the customers to
define the perceived service (PS). The
perceived service is what the customer
appreciates and comprehends of the supplied
service. Indeed, the same supplied service could
have a different impact on the customer
activities, if information on delivery is quickly
available.
If problems and relative solutions are
immediately pointed out to the customer, his
reaction will be surely different from having no
information until the last minute (Franceschini
and Rafele, 2000).
Developing the framework, each macro-
class is divided into sub-classes, which
identify specific features of the service
belonging to the macro-class, as shown in
Figure 4.
The class, tangible components, includes
those elements or resources which allow a
company to supply the service:
. assets (physical instruments and operative
means), divided into internal (handling
and warehousing) and external
(transport);
. personnel (who really generate products and
contribute to control); and
 Logistic service measurement: a reference framework Journal of Manufacturing Technology Management
Carlo Rafele Volume 15 . Number 3 . 2004 . 280-290

Figure 3 Comparison between service dimensions in PZB and logistic model

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Figure 4 The structured model for the service level measurement

. inventory (raw materials and semi-finished
products to transformed into finished
products to push along the chain); and
. availability, which indicates the existence of
products along the process.
The ways of fulfilment class considers
how the service is supplied to customers,
and the ability of suppliers in managing
order variations in terms of quantity or
time. Also this class is divided into four
sub-classes:
(1) flexibility (it represents the ability of a
company to satisfy variations in scheduled
orders);
285
(2) service care (it comprises the parameters for
carrying out a supply service);
(3) supply conditions (it defines the physical way
of the supply service); and
(4) lead time (it indicates the duration of the
delivery activities).
The last branch, informative actions, is divided
into four sub-classes comprising the informative
activities before, during and after the order, and
the new way to communicate with the network.
In the informative actions class, the division is
as follows:
(1) marketing (information on products and
selling conditions);
 Logistic service measurement: a reference framework
Carlo Rafele
(2) order management (checks on order
flow);
(3) after-sales (relations with the customers to
solve problems or needs); and
(4) e-information (it considers the new way to
manage and control orders by the
e-network).
Now, we have defined the model structure
and we have highlighted the main actions
or subjects involved in the service. In
order to provide consistency to the
classification described, we have to identify
measures of performance able to evaluate the
several sides of the service included in each
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sub-class.
Really, measures could be either qualitative
(there is no direct numerical measurement,
although some aspects of them may be
quantified) or quantitative (that may be
numerically described, referring to activities
performed, customer responsiveness, etc.). In
the informative actions class, most of the
indicators are mainly qualitative, with the
result that the definition of a quantitative value
for the PS is rather difficult. Certainly the
informative actions influence all the other
service indicators, but they are not separately
appreciable.
The identification of measures ± that mainly
are referable to indicators, as viewed from the
literature ± is almost infinite and it depends on
the peculiar industrial sector, and inside each
sector from the aspect either of underlined
competitiveness or of the data available.
Rather, one of the main goals in a mapping of a
process is the right identification of the most
significant indicators, frequently named
key performance indicators. As examples, in
Table I we have reported some examples of
indicators more related to the meaning of each
sub-class.
In the ways of fulfilment class, it is possible
to single out some homogeneous indicators,
which lead to the satisfaction of customers.
These indicators can be summed up in a single
value called ``level of service towards the
customer'' (LoS). From our point of view, LoS
is the synthesis of a set of activities, which can
be singularly measured by defining an
indicator for each activity; sometimes it is
called reliability.
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Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
Drawing from literature review and
practitioners' indications, the most general way
to consider LoS could be expressed through the
following ratio:
Deliveries
LoS ˆ :
Orders
In the ratio, the deliveries to be considered are
those satisfying completely the requests of the
customer in normal or urgent conditions: right
shipments, deliveries on time, in the correct
ordered quantity, in the way requested, suited
for the customer, without damage and without
mistakes in the paper work.
In other words, the deliveries which satisfy
the seven Rs of logistics (Shapiro et al., 1985).
The orders are the total requests of the
customers in the same period of time.
` ... The framework described was tested by a
survey on several companies in the
manufacturing and shipment sectors... '
A further concept deriving from the present
analysis concerns the impossibility of
summarising all the service components in a
single measure or indicator. The several
components of the service consist of factors
which differ very greatly, one from another, that
are neither comparable nor numerically linked
(for example, lead time vs flexibility, delivery
frequency vs equipment productivity). The
concept of service level takes into consideration
needs of specification about the peculiar
factors. The proposed framework identifies the
contributions of the logistic activities inside the
supply process.
Furthermore, the single indicator or
measurement is set out in definite links with
other sides of the service. In relation to the
specific indicators or features of the logistic
service, which a company intends to highlight,
they are recognisable inside the model,
understanding their own influence on the
overall service. Thus, the effect of activities on
the final result of the service could be
anticipated, trying to modify the action during
the development of the service.
A quantitative evolution of the proposed
model could be developed, starting from a
 Logistic service measurement: a reference framework Journal of Manufacturing Technology Management
Carlo Rafele Volume 15 . Number 3 . 2004 . 280-290

Table I Performance indicators in the specific sub-classes

Tangible components
Internal Equipment productivity = Number of orders (or UL(*), or quantity) delivered/produced divided by the period of time considered
assets Surface utilisation = Used surface of warehouse divided by the total surface of warehouse
Volume utilisation = Used volume of warehouse divided by the total volume of warehouse
etc.
External Trucks fill rate = Number of UL(*) or quantity loaded divided by the number of UL(*) or quantity available in the same period of time
assets Accident impact = Number of accidents divided by the number of journeys in a certain period of time
etc.
Personnel Personnel efficiency = Number of orders (or UL(*), or quantity) delivered/handled divided by the number of persons working or hours worked
in the same period of time
Accident severity rate = Number of accidents divided by the number of persons working or hours worked
etc.
Inventory/ Slow/medium/fast moving = Number of orders (or UL(*), or quantity) included in slow/medium/fast moving class divided by the total number
availability of orders (or UL(*), or quantity) in the warehouse in the same period of time
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Physical and accounting correspondence = Number of orders (or UL(*), or quantity) with mistakes divided by the total number of orders (or
UL(*), or quantity) in the warehouse in the same period of time
Stock turnover = Number UL(*) or quantity delivered or shipped divided by the average stock in the warehouse in the same period of time
Stockout = Number of orders (or UL(*), or quantity) out of order divided by the total number of orders (or UL(*), or quantity) ordered in the
same period of time
etc.

Ways of fulfilment
Flexibility Flexibility = Number of special/urgent/unexpected orders (or UL(*), or quantity) confirmed to the customer divided by the total number of
special/urgent/unexpected orders (or UL(*), or quantity) required by the customer multiplied by 100 in the same period of time
etc.
Service care Punctuality = Number of orders (or UL(*), or quantity) delivered on time divided by the total number of orders (or UL(*), or quantity)
delivered multiplied by 100 in the same period of time
Regularity = Number of orders (or UL(*), or quantity) delivered with a
t of delay/advance divided by the total number of orders (or UL(*),
or quantity) delivered multiplied by 100 in the same period of time
Completeness = Number of full orders (or UL(*), or quantity) delivered divided by the total number of orders (or UL(*), or quantity) delivered
multiplied by 100 in the same period of time
Correctness = Number of mistake orders dispatched divided by the total number of orders dispatched multiplied by 100 in the same period
of time
or
Number of codes/articles sent back divided by the total number of codes/articles sent multiplied by 100 in the same period of time
Harmfulness = Number of ``damaged'' orders dispatched in a period divided by the total number of orders dispatched in the same period
multiplied by 100
Delay = Number of days of delay or (number of days of delay divided by the number of days promised) multiplied by 100
etc.
Supply Delivery frequency = Number of orders (or UL(*), or quantity) delivered in a certain period of time
conditions Shipped quantity = Quantity shipped in a certain period of time or quantity dispatched for each shipment
Way of packaging and way of shipment, etc.
Lead time Total order cycle time occurring from the arrival of a customer order to the receiving of goods or cycle time of the single activities (order
transmission, order processing, order composition, order transfer to the production plant, article production, warehouse delivery, final
delivery to the customer)

Informative actions
Marketing Range completeness, information on products and sell assistance, etc.
Order Documents management (invoices and orders), client contacts and order advancement state, etc.
management
After sales Back orders, claims management, use assistant and payment management, warranty conditions, etc.
e-information Web site completeness, ease of making orders by network and data transmission security, etc.
Note: UL(*) = unit loads

287
 Logistic service measurement: a reference framework
Carlo Rafele
conversion of the indicators based on a
weighted scale representing the achieved
performances, i.e. value one for low
performance, value five for optimum.
Therefore, in order to achieve an overall value
of the service, the converted value can be
grouped by a ranking method. The global index
obtained in this way represents a score that
reflects several features of the service in a
homogeneous scale. This logistic service index
can be used for comparison in several
evaluations: for monitoring the same company
at different times, for a benchmarking analysis
of the competitors, for a target definition of the
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services with the partners in the supply chain,
and so on.
The framework described was tested by a
survey on several companies in the
manufacturing (for example, Valeo, Embraco)
and shipment (for example, TNT, Federal
Express) sectors. Information concerning
Italian companies or international companies
operating in Italy was obtained by direct
contacts and Web site analysis. In particular,
the following issues of the logistic service were
investigated:
. the most important indicators for the
logistic service;
. the concept of customer service; and
. the comprehension of the logistic service
component links.
The first results of the analysis indicate that
companies use almost the same main
indicators, sometimes with different
interpretations. There is a misunderstanding
about the meaning of customer service and
there is low comprehension of the influences
among the different components of the
service.
As regards the first point, the most commonly
used indicators were reliability, completeness,
correctness, harmfulness, productivity, lead
time (especially towards the customer), delay
(in total days or in percentage towards the
due date), regularity, flexibility, availability,
scrap level.
As regards the second point, most of the
companies indicate a different meaning of the
``level of service'', which is generally
identified with the most important indicators:
for example, for the courier sector the lead
288
Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
time is one of the ``musts''; in the jewellery
trade security and the prevention of damage
are the most relevant aspects; in the
automotive chain, operating in just-in-time,
punctuality and correctness are the basic
factors.
Finally, all the companies strongly underline
the necessity to deepen the comprehension of
the links among the service parameters together
with a classification, which could permit an
oriented research of the sources of inefficiencies
and mistakes.
Conclusions and further questions
We draw the conclusion that customer service is
measurable even though it is quite difficult to
identify client quality perception in
consequence of the informative actions
component. The level of service is certainly
influenced by not completely measurable
factors like marketing, order managing and
after-sales activities: these elements modify the
appraisal of the service, but they cannot be
separately evaluated.
From this point of view, the measure of the
service we can obtain should be close enough
to the PS. But what about customers' needs?
Can the firm really offer what the client
needs? In other terms, what about the desired
service?
The desired or expected service (DS) is what
the customer has in mind, what really satisfies
his needs. The desired service is influenced by
external information, which customers get
from the market, developing a benchmarking
activity (Figure 5). Therefore, it is necessary to
supply a perceived service closest to the
Figure 5 Perceived service and desired service
 Logistic service measurement: a reference framework
Carlo Rafele
desired service. Knowing that it is impossible
to enter into the customer's mind, the
company could reach this goal by identifying
the basic elements, which influence customer
delays.
It is not easy to identify these elements, as
discussed again by Parasuraman et al. (1985;
1988). They showed that the elements that
could influence DS are: personal experience,
individual requirements, and marketing. These
elements are not quantitative; thus you cannot
obtain a value for client DS. Indeed, they are
inside the clients' minds.
In conclusion, it is not possible to evaluate
Downloaded by WEIZMANN INSTITUTE OF SCIENCE At 05:49 30 January 2016 (PT)
DS directly, but it could be modified through
particular levers. These levers are tied up to
firm variables as seen by clients. Regarding
these variables we can achieve quantitative
values of the PS. How to proceed? It is
necessary to define those variables which
interest clients and then try to evaluate them
numerically. Thus, we cannot evaluate DS
itself, but a PS level close to the DS level could
be defined. At this stage, it is important to
support the service-monitoring system with a
benchmarking activity in order to compare the
level of service of the single firm with the other
competitors.
` ... we have defined a hierarchy of
activities classes, which contribute to
the level of service in each tier of the
supply chain, and we have shown some
examples of the indicators inside each
class... '
Other questions arise from the previous
analysis, which we will develop in the next
studies.
First, we have defined a hierarchy of activities
classes, which contribute to the level of service
in each tier of the supply chain, and we have
shown some examples of the indicators inside
each class. Now, we have to attribute each
indicator used in the logistic practice to the
classes. This is necessary for defining correctly
the contribution of each activity (linked to a
specific indicator) inside the overall process. In
such a way, a company could identify its own
289
Journal of Manufacturing Technology Management
Volume 15 . Number 3 . 2004 . 280-290
indicators among the others or consider new
ones individually.
Second, as we have explained, the economic
and financial indicators arise from by the
engineered indicators and the operational
activities cause the relative costs. Anyway, a
complete logistics measurement has to include
both kinds of indicators. A next step of the
research will be the identification of the specific
link between each operational activity/indicator
and its homologous financial one. The
definition of the connections will allow one to
evaluate completely the best level of service for
the company.
Third, inside each process (i.e. process N),
many resources work together for the same
goal (i.e. several job shops building different
parts of the product, more company partners
developing services inside the same
production process). The complete service is
an aggregation of all these contributions.
To evaluate the upper level of service, a
vertical integration of the specific
performance indicators should be defined.
However, we supposed that ± in some way ±
we can value service level at a single stage,
but in a supply chain we have several
service levels, one for each tier of the
chain. Therefore, we have to join indicators
in a horizontal line along the chain. Then,
each level of service is a horizontal
aggregation of other corresponding
indicators, referring to the previous tiers
along the logistic process. Finally, in each
tier, there are more actors who take part in the
process development (i.e. more suppliers for
different components to be assembled in
finished products). Thus, for each tier, the
global level of service is the composition of
the single contribution of any supplier and
we can deal with transversal integration
(Figure 6).
The definition of a logistic performance
measurement system has been till now an
open problem. In this paper, we have tried to
show a way to classify the performance
indicators, building a hierarchy among them.
Anyway, many questions have to be solved
before the analysis is finished and a complete
outline of a logistic measurement system is
effected.
 Logistic service measurement: a reference framework
Carlo Rafele
Figure 6 Horizontal, vertical and transversal components of the service level
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