Logistics key performance metrics

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A logistics KPI or metric is a performance measurement that is used by logistics managers to track, visualize, and optimize all relevant logistic processes in an efficient way. A KPI is a metric… but not just any metric. A KPI is a metric focused on a KEY element of business, departmental, or team performance. The following areas are those where KPIs will be necessary

  1. Order capture
  2. Inventory management
  3. Purchasing and supplier management
  4. Production/manufacturing
  5. Warehousing
  6. Transportation

Supply chain monitoring with SAP

to be added soon..

SCOR' KPI-s

Reliability

The Reliability attribute addresses the ability to perform tasks as required. Reliability focuses
on the predictability of the outcome of a process. 

Perfect Order Fulfillment

[Total Perfect Orders] / [Total Number of Orders] x100%
  • An order is considered perfect if the products ordered are the products provided and the quantities ordered match the quantities provided (% In Full). 
    • [Total number of orders delivered in full] / [Total number of orders delivered] x 100%
  • A delivery is considered perfect if the location, specified customer entity and delivery time ordered is met upon receipt (Delivery Performance to Customer CommitDate). 
    • [Total number of orders delivered on the original commitment date] / [Total number of orders delivered] x 100% 
  • Documentation supporting the order line is considered perfect if it is all accurate, complete, and on-time (Accurate Documentation). 
    • [Total number of orders delivered with accurate documentation] / [Total number of orders delivered] x 100% 
  • The product condition is considered perfect if the product is delivered/faultlessly installed (as applicable) on specification, with the correct configuration, with no damage, customer ready, and is accepted by the customer (Perfect Condition)
    • [Number of orders delivered in Perfect Condition] / [Number of orders delivered] x 100%

Responsiveness

The Responsiveness attribute describes the speed at which tasks are performed.

Order Fulfillment Cycle Time

For each individual order, this cycle time starts from the order receipt and ends with customer acceptance of the order.

[Sum Actual Cycle Times for All Orders Delivered] / [Total Number of Orders Delivered] in days
  1. Source Cycle Time: Source Cycle Time - (Identify Sources of Supply Cycle Time + Select Supplier and Negotiate Cycle Time) + Schedule Product Deliveries Cycle Time + Receive Product Cycle Time + Verify Product Cycle Time + Transfer Product Cycle Time + Authorize Supplier Payment Cycle Time
  2. Make Cycle Time: Make Cycle Time - (Finalize Production Engineering Cycle Time) + Schedule Production Activities Cycle Time + Issue Material/Product Cycle Time + Produce and Test Cycle Time + Package Cycle Time + Stage Finished Product Cycle Time + Release Finished Product to Deliver Cycle Time
  3. Delivery cycle time:  MAX {[Reserve Resources & Determine Delivery Date Cycle Time + (Consolidate Orders Cycle Time + Schedule Installation Cycle Time) + Build Loads Cycle Time + Route Shipments Cycle Time + Select Carriers and Rate Shipments Cycle Time], + Receive Product from Make/Source Cycle Time} + Pick Product Cycle Time + Pack Product Cycle Time + Load Vehicle & Generate Shipping Documentation Cycle Time + Ship Product Cycle Time + (Receive & Verify Product Cycle Time) + (Install Product Cycle Time)
  4. Return Cycle Time = (Identify need for Return + Coordinate and Schedule Return + Return Transit time + Receive Return Product Time + Verify and Transfer Return Product Time).

Agility

The Agility attribute describes the ability to respond to external influences; the capability and
speed of change.

Upside Supply Chain Adaptability
Downside Supply Chain Adaptability
Overall Value-at-Risk (VaR)

Cost

The Cost attribute describes the cost of operating the supply chain process.

Total SC Management Cost

TSCMC = Cost to Plan + Cost to Source + Cost to Make + Cost to Deliver + Cost to Return + Mitigation Costs

  • Cost to Plan = Sum of Cost to Plan (Plan + Source + Make + Deliver + Return)
  • Cost to Source = Sum of Cost for (Supplier Management + Material Acquisition Management)
    • Supplier Management = material planning + planning procurement staff + supplier negotiation and qualification + etc. 
    •  Material Acquisition Management = bidding and quotations + ordering + receiving + incoming material inspection + material storage + payment authorization + sourcing business rules and rqmts. + inbound freight and duties + etc.
  • Cost to Make = Sum of Direct Material, Direct Labor, and Direct non-Material Product-related Cost (equipment) and Indirect Product-related Cost
  • Cost to Deliver = Sum of Cost of (Sales order management + Customer Management)
    • Sales order management = inquiry & quotations + order entry & maintenance + channel management + order fulfillment + distribution + transportation + outbound freight and duties + installation + customer invoicing / accounting + new product release / phase-in + etc.
    • Customer Management = financing + post-sales customer service + handling disputes + field repairs + enabling technologies + etc.
  • Cost to Return = Sum of Cost to Return (to Sources + from Customers)
    • Cost to Return to Source (sSRx) = Verify Defective Product Costs + Disposition of Defective Product Costs + Identify MRO Condition Costs + Request MRO Return Authorization Costs + Schedule MRO Shipment Costs + Return MRO Product Costs + etc.
    • Cost to Return From Customer (sDRx) = Authorization Costs + Schedule Return Costs + Receive Costs + Authorize MRO Return Costs + Schedule MRO Return Costs + Receive MRO Return Costs + Transfer MRO Product Costs + etc.
  • Mitigation Costs (Cost to Mitigate Supply Chain Risk) = Sum of Supply Chain Risk Mitigation Costs (Plan + Source + Make + Deliver + Return)

Cost of Goods Sold (COGS)

  • COGS = direct material costs + direct labor costs + indirect costs related to making product

Asset Management Efficiency

The Asset Management Efficiency (“Assets”) attribute describes the ability to efficiently
utilize assets. Asset management strategies in supply chain include inventory reduction and insource vs. outsource.

Cash to Cash Cycle Time

The time it takes for an investment made to flow back into a company after it has been spent for raw
materials. For services, this represents the time from the point where a company pays for the
resources consumed in the performance of a service to the time that the company received payment
from the customer for thoseservices.
  • Cash-To-Cash Cycle Time = [Inventory Days of Supply] + [Days Sales Outstanding] - [Days Payable]
    • Days Sales Outstanding: The length of time from when a sale is made until cash for it is received from customers. The amount of sales outstanding expressed in days.
    • Days payable: The length of time from purchasing materials, labor and/or conversion resources until cash payments must be made expressed in days.


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