How can we apply performance indicator (KPI)in Logistics?

Many organizations tend to have a Supplier/Service Provider/Vendor Assessment report where the supplier is evaluated for every order delivered. The supplier can be assessed/measured against the following fields:

• Availability of supplies (short delivery period).
• Ability to ship per consignment (Batches).
• Delivery on Time.
• Quality of product as agreed upon.
• Flexible payment terms.
• Committment to contract.
• No major foul ups.

Firstly, you will need to know what you want to measure. There are two main Logistics KPI's (DIFOT and DOT - Delivered in Full On Time, and Delivered on Time). There are others, however the term 'logistics' infers the transportation element of the supply chain.

You can use a 'dashboard or scorecard to record the details. www.ezscorecard.com is great for this.

Remember, there are 3 primary indicators, KRI, PI, and KPI. KPI's are current and are used to correct or realign a questionable process.

For DIFOT and DOT, the areas that impact are operations, inventory and transport. You will need either a manual system that you can identify the data, or an MRP that you can draw the data from.

The concept of KPI is that it is a continuous improvement toll that identifies those areas where focus for a 'fix' is needed.