KEY METRICS FOR PERFORMANCE

MEASUREMENT IN LOGISTICS SECTOR

TITLE OF THE PROJECT

STATE OF PROBLEM
Evaluation and Identification of the performance measure and metrics in logistics sector. This study attempts to provide
an overview of most recent PMSs in logistics and SCM systems and also to identify the requirements or characteristics of
a good PMS and synthesize the same to enterprise environment

AIMS AND OBJECTIVES

To gain insights into various PMSs and their requirements to support the decision making process

To determine key performance measures and metrics in logistics and SC environments

To understand the requirements or characteristics of a good PMS and synthesize the same to enterprise environment .

RESEARCH METHODOLOGY
The research methodology is based on a review of recent publications on PMSs analysis of the current PMS with the aim
of identifying the key measures, and the corresponding application areas in order to determine overlapping measures
through a systematic elimination process. As a first step, for the selection of suitable performance measures and metrics,
key business processes and value adding areas are examined and then parameters/variables that will affect these
processes and areas are identified
INFORMATION COLLECTION/ ANALYSIS AND FINDINGS

Organizations the world over are facing challenges to stay competitive in the global market. Changes in customer
demand, a greater variety of offerings, and a customer-oriented approach are all factors that have altered the approach
these organizations. To work with these factors’ organizations have had to improve their supply chains by focusing on
Supply Chain Management, SCM. SCM encompasses the relationships with suppliers and customers to provide more
value to the customer while reducing the costs across the supply chain. The KPIs also help the organization to identify
gaps between what they are currently doing and what they are set to achieve, this can aid them in identifying issues.
However, identifying and setting the right KPIs is difficult since organizations lack practical guides on how these should
be developed.

In order to evaluate and improve logistics performance, it is necessary to identify the relevant performance dimensions
and indicators that reflect the strategic goals and operational requirements of the organization. Moreover, it is important
to consider the interrelationships and trade-offs among different dimensions and indicators, as well as the external factors
that may influence logistics performance, such as market conditions, customer expectations, and environmental issues.
Organizational performance depends on various factors, but some of them are more essential than others for achieving
the desired outcomes and ensuring long-term viability. These factors are called KPIs and they measure the extent to
which the organization meets its strategic objectives and operational standards.

The SCOR model is a framework that was developed by the Supply Chain Council to help organizations structure their
supply chain processes within any industry. The model is widely used in the industry and has become a standard for
companies that want to improve their supply chain management practices. The SCOR model provides a comprehensive
framework for managing the entire supply chain, from the procurement of raw materials to the delivery of finished
products to customers. The model is based on a set of standardized definitions, metrics, and best practices that can be
used across different industries and organizations. The SCOR model consists of four core processes: Plan, Source, Make,
and Deliver. One of the benefits of the SCOR model is that it provides a standardized language and framework for supply
chain management. This makes it easier for organizations to collaborate and communicate with their suppliers,
customers, and partners.

To gain an understanding of how the current PMS is structured and what PMs are involved in Company A, internal
reports from the company’s Power BI was investigated. The one of the data collection methods employed in this study
was semi-structured interviews. The objective of these interviews was to gain a comprehensive understanding of the PMs
used by the supply planning department and the various factors that influence them. They were also used to identify
various PMs from literature that were deemed relevant. Secondly, a questionnaire was utilized to capture expert opinions
about the relationship between PMs which is presented as the second step in the ISM. The questionnaire measured the
perceived relationships between different PMs and was distributed to the supply planning department.
To further understand the relationship between different PMs the method Interpretative Structural Model, ISM was
utilized. The method uses various of processes to incorporate expert opinion in a qualitative breakdown of the structure
of the analysis relationships. This entailed that the analysis followed both a deductive and inductive approach.

ISM is a tool for simplifying complex issues by leveraging the knowledge of relevant experts. This interactive learning
process effectively transforms unclear and ambiguous mental models of systems into clear and well-defined models that
can be applied for various purposes. The methodology is structural, as an overall structure is derived based on the
identified relationships, and modelling in that the relationships and overall structure are depicted in a digraph model. The
use of ISM provides a visual system that portrays all connections and the complete structure, enabling a more
comprehensive understanding of the interrelationships among factors. Additionally, the ISM methodology is
characterized by its gathering and learning process, which facilitates knowledge acquisition and sharing among
participants. ISM methodology is an effective approach for organizing complex issues and providing a comprehensive
framework for understanding the interrelationships among factors.

A major advantage of ISM is that it does not require any prior knowledge. Participants only need to have a basic
understanding of the system or problem to answer the questions generated by the computer. This means that a wider
range of stakeholders can participate in the process. ISM also guides and documents group deliberations, which
facilitates and records discussions among participants on complex issues in a structured and systematic way. It produces a
graphical representation of the problem situation that can easily be communicated to others. By focusing participants'
attention on one specific question at a time, ISM improves interdisciplinary and interpersonal communication and helps
to clarify assumptions and perspectives on the system or problem.

Finally, reliability refers to the consistency and replicability of the findings. To ensure reliability, it is recommended to be
transparent in methodological procedures and to allow for replication by other researcherS. In this study, the authors have
provided thorough descriptions of methodological procedures and justifications for methodological choices to ensure
transparency.
CONCLUSION

The consent requirement was met by obtaining the participants' permission to conduct and record the interviews. The
information requirement was fulfilled by providing sufficient information for the participants to make an informed
decision about their participation. However, due to the size of the company, some information might be identifiable by
people with prior knowledge of the business, such as the participants' colleagues and case representatives.

Hence, the company operates in a highly competitive industry. The company's logistics system plays a crucial role in its
ability to deliver high-quality dairy products to its customers worldwide. However, the company's current KPIs for
logistical performance may not provide a comprehensive view of its operations. Updating these KPIs could help the
company to act more proactively, improve its logistical performance, and ensure that its customers continue to receive
high-quality dairy products in a timely and efficient manner.

The company’s current supply chain is simplified. Products are created in the factory and then pushed out to the
warehouses; the volumes are dictated by a demand forecast. This demand forecast also dictates the production of
products. In the factory, products are categorized into two categories: fresh or special. This classification is done after the
shelf life of the products which alters how the product is handled. The special products are then handled by the
warehouses and distributed between them with their stock levels monitored to avoid potential stockouts or shortages,
meaning lost sales. In the warehouses, most of the waste is generated.