“We support

companies in creating
more value for their
customers”
Supply
pp y Chain Keyy Performance Indicators
 2
GC&P Performance Measurement System (LOGOS)
Logistics Costs

Supplier Service Analysis Cross

CrossAnalysis
Analysis Customer Service Analysis
Vendor Rating

Suppliers WH WH Customers
RM
Factory FP

OEE Analysis
A l i
OLE Anlaysis
Flow Index
 3
Customer Service: Order Line Dates
Date Date Date Date Date of Last
Received Entered Required Promised Shipment

Time

Customer Waiting Time

FLEX

Delay

Order Lead Time

 4

Customer Service: Which Indicators?

Indicators representing an average: e.g. Average customer waiting time, average flexibility,
average reliability,
reliability average order lead time.
time

Indicators representing a percentage: e.g. On time delivery (% of order lines delivered on

time) flexibility (% of order lines confirmed on the same date required by customer),
time), customer) order
lead time (% of order lines delivered within a lead time of XX-days)

Note: Both the average and the % indicators have the advantage of being simple to calculate
and to understand, but at the same time they do not give a comprehensive overview of what is
happening.

Indicators represented by a histogram or curve : e.g. Customer Waiting Time Curve,

Flexibility Curve, Reliability Curve, Order Lead Time Curve, etc.

Indicators can be calculated either on the total number of order lines, or just on a few of them
(for instance: order lines of a particular product / item range, order lines by customer, order
lines related to a certain period). In such cases we speak of “analysis segmentation”.
Customer Service: The 4 Service Curves 5

Customer Waiting Time Curve Flexibility Curve

2500 12000

2000 A CWT Curve like this is almost 10000 To be flexible is fine, but only if the service
impossible (one-item-only companies). 8000 policies are shared with customers. Should
1500
Line N°

But it could show more peaks as related the Flex curve be erratic, it might be

Line N°
6000
1000 to the product ranges. disastrous for the company!
4000
500
2000

0 0
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Days of Customer Waiting Time Days of Flexibility

Re liability Curv e
Order Lead Time Curve
3500

2000
3000
1800
1600
2500
1400
The OLT curve shape is affected by
1200

Line N°
2000
LineN°

1000
the trend of the other three curves.
1500
800
600
1000
400
500 200
0
0 1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89
6

11

15

19

23

27

31

35

43

49

59

69
-9

-5

-1

7
-3

Days
y of Delay
y
Days of Lead Time
 6
Customer Service – A Real Example of Reliability Curve
 7

Customer Service – A Real Example

p of Order Lead Time Curve

Service policies designed with accuracy: Some

items will be delivered in 1 week and others in
2-3 weeks.

Generally speaking, customer is happy to find that service policies are well defined
and that,
that for instance,
instance the most complex items are delivered later while the simplest
are delivered sooner.
 8

Customer Service: Files and Data Needed

Customer Database Item Master File
Customer Code Item Code
Company Name Description
F t 1 (Country)
Feature (C t ) Pl t Code
Plant C d
Feature 2 (Area) Standard Cost
Feature 3 (Category) Lead Time
Feature 4 (Etc.) Unit of Measurement
F t 1
Feature
Feature 2
Order Lines Feature 3
Order Number Feature 4 (Etc.)
Order Line Number
Order Date Shipment Lines
Required Delivery Date Plant Code
Confirmed Delivery Date Warehouse Code
Order Line Quantity Shi
Shipment N b
Number
Customer Code Shipment Line
Item Order Number
Plant Code Order Line Number
Warehouse Code Shi
Shipment D
Date
Note 1 (Order Type) Quantity Shipped
Order Not Completed (Y/N Flag)
Order Cancelled (Y/N Flag)
Note: All the data in the above lists can be retrieved from anyy information
system.
 9
Customer Service – Some Tips to Consider

The fundamental service measurement indicators are:

ƒ Reliability Curve
ƒ Order Lead Time Curve

The customer waiting time and flexibility are not always possible to calculate, since the
delivery date as requested by customer is sometimes not managed by IT systems.

It could be interesting to measure the speed at which a confirmation of delivery date is

given
i to the
h customer.

For a meaningful analysis, a long time frame (from 6 months to 1 year) should be
n id r d
considered.

Indicators can be calculated on the basis of order lines, of quantities or by amount (How
many lines/Kg/€ could be delivered on time?)
 10
Customer Service – Some Tips to Consider

Indicators can be calculated either in working days or calendar days.

Late deliveries do not just decrease the customer satisfaction. They can even show one or
more among the following:
1. Lack of service policies.
p
2. Inability to determine the delivery date.
3. Problems with the production planning.
4. Insufficient production capacity.

An erratic shape of the Order Lead Time Curve shows that a delivery date determination
policy is missing.

Beside meaning a lack of service to customers, partial deliveries cause a cost increase for
handling and transportation.

Indicators can be also used as a tool in negotiations with customers.

 11
Exercise 02-01

Draw the on time delivery Curve and the Order Lead time Curve for the Company
CINZANO

Calculate the average delay and the average order lead time

How manyy lines have been delivered with a delayy of less than 1 week?

Is the customer service the company is providing good or not?

 12

Inventory and The Flow Of material

One often-used classification is related to the flow of materials into, through, and out of a
manufacturing
f t i organization:
i ti

Raw materials: purchased items received which have not entered the production process.

Work-in-process: raw materials that have entered the manufacturing process and are being
worked on or waiting to be worked on.

Finished goods: products that are ready to be sold as completed items.

Distribution inventories: finished

s d ggoods
ds located
c d in the ddistribution
s b system..
sys

MROs: item used that do not come part of the product (maintenance supplies, spare parts and
consumables such as lubrificants,, cleaningg staff))
 13

Whyy Inventories
Anticipation inventory: inventories are built up in anticipation of future demand, for example they
are created ahead of a peak selling season.

Fluctuation inventory (safety stock): inventory is held to cover random unpredictable fluctuations
in supply and demand.

Lot-Size inventory: items purchased or manufactured in quantities greater than needed immediately

Transportation inventory: they exist because of the time needed to move goods from one location
to another such as from a plant to a distribution center.

Hedge inventory: some products such as minerals and commodities are traded on a worldwide
market. The price of this products fluctuates according to world supply and demand.

Information System data is not updated

Designers do not standardize components which causes unnecessary increases in complexity.
 14

Inventory Costs
The following costs are considered in inventory management decisions:

Item costs: is the price paid for a purchased item. For an item manufactured in-
house, the cost includes direct material, direct labor, and factory overheads.

Carrying costs include all expenses incurred by the firm because of the volume of
inventory carried (capital cost, storage cost, risk cost such as obsolescence, damage,
pilferage deterioration).
pilferage, deterioration)

Ordering costs: are those associated with placing an order either with the factory or
a supplier
li (purchase
( h orderd cost, production
d i controll costs, set up costs))

Stockout costs: if demand during the lead time exceeds forecast we can expect a
stockout
 15
Inventoryy Management
g - Introduction

Need of inventory measurement tools.

tools

Need of inventoryy management

g policies.
p

TO MAKE IN ORDER TO PROVIDE

WHEN TO ORDER?
DECISIONS THE REQUIRED
ABOUT HOW MUCH TO CUSTOMER SERVICE
ORDER?
 16
y – Steps
Cross Analysis p
Classify items into groups: Raw Materials (RM), Work in Process (WIP), Finished Products (FP).
Determine the average stock and annual usage per each item.
Multiply the average stock and the annual usage by the item standard cost.
Classify the items according to their annual dollar usage and average stock value.

USAGE
Cl Cl Cl Cl
Class Class Class Class A B C D
A B C D Cl A

STOCK
Cl B
USAGE
STOCK Cl C

Class Class Class Class Cl D

A B C D
 17

Cross Analysis – A Real Example (FPs)

Stock Usage
g
T t l
Total

Stock
Usage
IT
Item N°

Stock
Usage
IT
Item N°

Stock
Usage
IT
Item N
N°

Stock
Usage
IT
Item N°

Stock
Usage
IT
Item N°
 18

Inventory Turns and Days of Supply

Inventory Annual FP Shipped € 6,050,471
6 050 471
Turns = = = 4 Turns / Year
Total Average Stock € 1,506,061

What do the inventory turns mean? At the very least it means that with 1.5 M of inventory a
company is able to generate 6 M in sales.

Total Average Stock € 1.506.061

Days of = Calendar Days
= = 90
Supply Average Daily Shipments € 16.577 (55 Working Days)

Days of Supply is a measure of the equivalent number of days of inventory on hand, based on
usage.
 19

Stock Control - Files and Data Needed

Stock file Item Master File
Part Number Part Number
Plant Number Description
Warehouse Number Plant Number
Quantity on Hand Standard Cost
Date Feature 1 (Part Type)
Feature 2 (Category)
WH Transaction File Feature 3 (Family)
It Number
Item N b Feature 4 (Etc.)
Plant Number
Warehouse Number WH Transaction type file
Transaction Type Transaction Type
yp
Quantity Handled Description
Transaction Date Plant Number
Warehouse Number

Note: All the above data can be retrieved from any information system.
 20
Cross Analysis – Some Tips to Consider
The stock for each item can be either the Average Stock or Stock on Hand. Average Stock is a
better measure.

The choice of transactions types is very important in running the cross and turns analysis.

In calculatingg the item usage

g do not include internal transfers.

In case the number of items having neither consumption nor stock (DD class) is high, it
g be that standard costs have not been calculated for all items.
might

The Cross Analysis should be run for Raw Materials (RM), Work-In-Process (WIP) and
Finished Products (FP).

Flow curves show stock and lead time trends in time. The curve shape shows seasonality, the
number of orders, the number of pickings and the frequency of pickings. These are
phenomena which cannot be seen in a simple Cross Analysis.

Flow curves on a single-code provide what is usually called the “Item Logistics History ”.
 21
Exercise 02-02

Make the cross analysis for the finished products of the CINZANO Company.
Company
Comment on the final results.
On which parts number would you work to increase the turnover ratio?
Manufacturing Lead Time – Introduction
22

c
= Shop
Sh Floor
Fl

= Work Center

= Stores RM FP
b

Single
g Lead Time

Start End Cumulated Lead Time

Routing a + b + c STD Time Flow Index

Flow Curves /
Distribution Curves
 23
Manufacturing Lead Time - The 5 Elements
Manufacturing lead time is the time normally required to produce an item in a typical lot quantity.

For our purposes,

purposes it is the time from when the order is released to the shop floor to when the
order is completed and loaded into stock.

Manufacturing lead time consists of five elements:

Queue Time: Amount of time the job is waiting at a work center before operation begins.
Setup Time: Time required to prepare the work center for operation.
Run Time: Time needed to run the order through the operation.
Wait Time: Amount of time the job is in the work center before being moved to the next
work center.
Move Time: Transit time between work centers.
Move
Queue Setup Run Wait Queue Setup Run Wait

Among the above elements, the only one that generates value is Run Time; all the other
elements are Waste Time.
Generallyy speaking,
p g 95% of the production
p lead time is Waste Time.
 24
Manufacturing Lead Time – Flow Curves

Kg
g
WIP/Backlog
Load
Lead Time Unload

t
Flow Curves are the best tool to show the manufacturing lead time of a work center or of the
whole manufacturingg p
process.

The main problems in using the flow curve method are: determining the initial WIP, choosing the
unit of measure and the unit of time.
 25
Manufacturing Lead Time – The Flow Index

Lead Time
FI =
Run Time

The Flow Index measures the relationship between Lead Time and Run Time.
A Flow Index of 10 means that for each cycle time unit there are 10 lead time units. In other words: for each
Value Added hour,
hour 10 hours are needed.
needed
Manufacturing Lead Time – A Flow 26

I d C
Index Calculation
l l i E Example
l
Seq Avg RT Avg Lot LRT LRT
p
Description RT min
u. LT d
days size
i (pcs)
( ) min
i d
days
15 Hydraulic Presses 7,6 55 0,115 76 4.201 9
20 Preparations 6,4 18 0,038 89 1.605 3
25 Automatic welding 10,0 44 0,092 8 334 1
30 Manual welding 5,7 38 0,079 14 549 1
35 Turning 5,8 120 0,250 39 4.681 10
40 Drilling and riveting 3,7 137 0,285 10 1.404 3
45 Intermediate check 3,5 12 0,025 8 96 0
50 El t h
Electrophoresis i plant
l t 29
2,9 76 0 158
0,158 8 611 1
55 Transit 1,8 0 0,000 0 0 0
60 Final check 3,9 12 0,025 6 69 0
TOT 51,0 512 1,067 13.550 28
a b c

FI = a / b = 47.8
Manufacturing Lead Time – Files and Data 27

Needed
Work Center Master File Item Master File
Work Center Number Part Number
Description Description
Plant Code
Routing File standard Cost
Part Number Lead Time
Work Center Number Unit of Measurement
Sequence Feature 1 (Part Type)
Run Time Feature 2 (Category)
Setup Time Feature 3 (Family)
Feature 4 (Etc.)
Shop Order Master File
Shop Order Number Shop Order Detail File
Part Number Shop Order Number
Order Quantity Part Number
Q ntit Completed
Quantity C mpl t d Operation Number
Quantity Scrapped Actual Setup Time
Balanced Due Actual Run Time
Shop Order Date Initial Date
Shop Order DDuee Date Finish Date
Completion Date

Note: The data needed for Manufacturing Lead Time measurement are normally available in companies
that have a Shop Floor Data Collection System.
System
 28
Manufacturing Lead Time – A Few Tips to Consider

In order to reduce Manufacturing Lead Time, it is important to consider the following

manufacturing system items:

ƒ Layout

ƒ Capacity balance between processes (if processes are linked, a lack of balance causes
Waiting Time)

ƒ Planning and control tools

ƒ Lot size (the bigger the lot, the longer the Manufacturing Lead Time)
 29

Machine Efficiencyy – Overall Equipment

q p Effectiveness Ratio ((OEE))

OEE is a method to measure the overall effectiveness of equipment. It is calculated by

multiplying three ratios.
ratios

Availability Ratio

Performance Ratio

Quality Ratio

Normaly OEE is presented as a percentage.

 30

Efficiencyy – Overall Equipment

q p Effectiveness Ratio ((OEE))
Potential Time: 24h a day X 365 days
Potential Time

Theoretical available time: (potential time –

days closed, hours not worked, planned maintenance)
Theoretical Available Time
Available Time: (theoretical available time -
available time not used)

Available time Ex: (480 m - 60 m) = 420

Availability ratio: (Available time –

Downtime/Available time)
Setups
Working Time Breakdowns Ex: (420 m - 30 m) / 420 m = 92,9%
92 9%
Startup
Efficiency ratio: (Run Time X total
Net Working production/working time)
Minor Stoppages
Time
Reduced Speed Ex: (0,6m/units X 358 units) / 390 m = 55,1%

Quality ratio: (total production – defects)/Total

Real production
Time Defects
Ex: (358 units – 5 units) / 358 units = 98,6%
 31

Efficiencyy – Overall Equipment

q p Effectiveness Ratio ((OEE))

Work Center XY
OEE= Availability ratio X Performance ratio X quality ratio=
50,4% = Production Time

49,6% losses

Analisi delle Perdite Linea XY

40% 100%
99% 100%
97%
93% 90%
35%
86%
80%
29% 79%
30%
27% % % cum 70%

25% 23% 60%

56%
Losses Analysis 20% 50%

40%
15%

29% 30%
10%
7% 6% 20%

5%
4%
10%
2%
1%
0% 0%
Cambio Bobina e Regolazione e Fermo macchina Manutenzione Mancanza qualità Mancanza TPM Addestramento
setup verifica taratura per avaria Ordinaria stampa alimentazione da
tecnica stampante
 32

Example 1: Automatic Welding

100%
 33

Example
p 2: Stamping
p g

100%
 34

Example
p 3: Injection
j Moulding
g

100%
 35

Example 3: Injection Moulding (Losses Analysis)

TempoT
Attività Ore Peso% OEE
ot

STAMPAGGIO 19.949 65,47% 30.471 VERO

Mancanza Personale 4.155 13,64% 30.471 VERO

Mancanza Ordini 2.828 9,28% 30.471 FALSO
Prova Stampi 1.361 4,47% 30.471 VERO
Cambi Stampo 380 1,25% 30.471 VERO
Fermi Straordinari 320 1,05% 30.471 FALSO
Cambi Colore 313 1,03% 30.471 VERO
Pausa Pranzo/Cena 231 0,76% 30.471 VERO
Guasti Stampo (Almeno 10 Minuti) 228 0,75% 30.471 VERO
Avviamento/Spegnimento Macchine 222 0 73%
0,73% 30 471
30.471 VERO
Guasti Macchina (Almeno 10 Minuti) 201 0,66% 30.471 VERO
Mancanza Stampo Da Officina 77 0,25% 30.471 VERO
Pulizia (Gruppo Iniezione, Cilindro) 64 0,21% 30.471 VERO
Mancanza Componenti 47 0,15% 30.471 VERO
Regolazioni 47 0,15% 30.471 VERO
Guasti Robot (Almeno 10 Minuti) 26 0,09% 30.471 VERO
Materiale Difettoso 13 0,04% 30.471 VERO
Pulizia Macchina 4 0,01% 30.471 VERO
Pulizia Stampo 3 0,01% 30.471 VERO
Prova Colori 2 0,00% 30.471 VERO
Mancanza Attrezzisti 1 0,00% 30.471 VERO
TOT PERDITE 10.521 34,53%
 36
Efficiency – Files and Data Needed

Work Center Master File Item Master File Shop Calendar

Work Center Number Part Number Work Center Number
Description Description Week
Plant Code Day
Routing File standard Cost Shift
Part Number Lead Time Workstation Code
Work Center Number Unit of Measurement Available Time
Sequence Feature 1 (Part Type)
Run Time Feature 2 (Category)
Setup Time Feature 3 (Family)
Feature 4 (Etc.)
Shop Order Master File Shop Order Detail File Waste Type File
Shop Order Number Shop Order Number Workstation Number
Part Number Part Number Waist Type
Order Quantity Operation Number Operator
Quantity Completed Actual Setup Time Item Number
Quantity Scrapped Actual Run Time Shop Order Number
Balanced Due Initial Date Quantity Completed
Shop Order Date Finish Date Q
Quantity
i Scrapped
S d
Shop Order Due Date
Completion Date Time

Note: Data needed for the OEE calculations are not easyy to collect. Usuallyy the
OEE is used by companies with very advanced manufacturing systems.
 37
Focus - Total Productive Maintenance

Eliminate machine stoppages with Total Productive Maintenance (TPM).

Would not it be great if you had a maintenance program that fixed your equipment before it broke?
Because when your equipment is running as it should, you make products, meet deadlines and make money
while keeping customers happy. But if a machine breaks, it is not making you money – it is costing you
money. It hits Lean Manufacturing companies even harder. Lean systems minimize excess capacity and
links all machines and processes.
processes When one machine stops,
stops productivity screeches to a halt.
halt Here are some
warning signs that you need help:

Equipment experiences unexplained shut-downs and failures or needs constant repair.

Equipment operates at a slower speed than designed.
Productivity decreases due to machine-related problems.

You are not the only company with these problems.

problems The average Overall Equipment Effectiveness (OEE)
is 37%. That means the machinery is averaging only 22 minutes of operation out of every hour!

The Answer is Total Productive Maintenance (TPM).

The TPM system addresses your production operation with a solid, team-based program that is proactive
instead of reactive. It helps eliminate losses, whether from breakdowns, defects or accidents, etc.
 38
Focus - Total Productive Maintenance
How TPM Works
TPM begins by measuring and analyzing your Overall Equipment Effectiveness (OEE). This not only helps diagnose problems,
but also becomes the measurement to determine how successful TPM efforts are.
TPM then introduces the concept of Autonomous Maintenance, with machine operators as key members of the maintenance
team Historically,
team. Historically maintenance has been done by dedicated,
dedicated highly skilled employees,
employees not machine operators.
operators But machine
operators know their machines better than anyone. They can tell if their machine is not working perfectly, often from just the
sound or feel. They can alert maintenance people and provide excellent information. Also, when they perform routine
maintenance and lubrication, they become “process owners” while relieving skilled trades of simple yet time-consuming jobs.
Finally TPM shows how equipment can be modified,
Finally, modified and preventive and predictive tools can be applied to make daily
maintenance quick and easy.
The “Big Six” Wastes
TPM will also teach you how to recognize the “Big Six” equipment-related wastes and how to minimize them:
Setup and adjustment,
adjustment Breakdowns,
Breakdowns Idling and minor stoppages,
stoppages Reduced speed,
speed Startup,
Startup Defects
Properly implemented, TPM eliminates machine-related bottlenecks that hold up your processes and torpedo your productivity.
In addition, TPM will help you achieve:
Improved machine reliability
Extended machine life
Increased capacity without purchasing additional machines or sacrificing additional floor space
Improved teamwork between machine operators and maintenance people
Improved safety
Employees knowledgeable in machine-related processes
A more involved, creative workforce
The ability to re-allocate your skilled workforce by having machine operators perform routine maintenance
Dr. Sengupta (CEO Dr. Sengupta and Associates)
 39
Supplier Service
Purchase Order Entry Date Date Date Received
Requisition Date Date Needed Promised

Time

Paper cycle

Waiting time

FLEX

Reliability

Supplier Lead Time

Note: All the above data can be retrieved from any information system.
 40
Supplier Service – Files and Data Needed

Supplier Data Base Item Master File

Supplier Number Part Number
Company
p y Name Description
p
Feature 1 Plant Number
Feature 2 standard Cost
Feature 3 Lead Time
F t 4
Feature U i off Measurement
Unit M
Feature 1 (Part Type)
Feature 2 (Category)
Purchasing Order File
Feature 3 ((Family)
y)
Ord r Type
Order Tp
Feature 4 (Etc.)
Order Number
Order Date Goods Received File
Date Needed Bill Number
Date Promised Order Number
Supplier Code Order Date
Item Number Item Number
Order Quantity Receivedd Quantity
Unit Price Date Received
Warehouse Number
Note: All the above data can be retrieved from anyy information system.
y
Supplier Service – A Few Tips to Consider 41

The purchasing
Th h i office
ffi is
i overwhelmed
h l d by
b daily
d il routine
i activities,
i i i such
h as receiving,
i i expediting,
di i
etc. Little time is actually spent on selection and evaluation of suppliers or on stock level
analysis.

The basic indicators to measure supplier service are On-Time Delivery and Order Lead Time.

Comparing the System Lead Time and Actual Lead Time can be of especial interest and can
lead to reduction of inventory.
inventory

In order to get significant results from the analysis, it is necessary to take into account a time
span of at least 6 months, 1 year.

Indicators can be calculated on the basis of either order lines, volumes or value.

Indicators can be expressed

p in either workingg days
y or calendar days.
y

Partial deliveries can affect both production and customer service. They can also cause a
receiving and handling cost increase.

Indicators can be used as a tool in negotiations with suppliers.

All of the above can be applied to subcontractors, too.

 42
Vendor Rating
 Logistics Costs 43

EBIT
P & L of the logistics
process
Operating Cost Revenues

General & Administrative

Operations Cost
Expenses

M
Materials
i l and
d
Logistic Cost Labor Overhead
Subcontractors

Inbound logistic Cost Internal Logistic Cost Outbound Logistic Cost

 44
Logistics Costs

Inbound Logistic Cost Internal Logistic Cost Outbound Logistic Cost

1. Personnel 1. Personnel (planning 1. Personnel (customer

(purchasing, stores and control, stores service, stores &
& inventory & inventory inventory personnel)
personnel) personnel)
2. Warehouse
2. Warehouse 2. Warehouse Equipment
q p
Equipment Equipment
3. Rents
3. Rents 3. Rents
4. Outbound
4. Inbound 4. Inventory Transportation
Transportation Opportunity Cost
5. Distribution Centers
5
5. Inventory
6. Inventory
Opportunity Cost
Opportunity Cost
 45
Performance Measurement Reference Table

Indicators Benchmark
Customer On-Time Delivery > 95%

Company Inventory Turns > 10

Flow Index < 10

OEE > 85%

Supplier
l On-Time
T Delivery
l > 95%

% of Logistics Cost on Revenues* < 8%

*Note: Excluding distribution centers and subsidiaries costs.

 46
The Purpose of Logistics Meeting

– Examine monthly the logistic performance trends:

Service to customer
Stock levels (total and by part type)
Production lead time
Efficiency / Productivity
Service from suppliers

– Detect problems and perform analysis according to the Denim cycle (plan-do-
check-act).
h k )

– Define coordinated improvement actions.

 47
The steps in running Logistics Meeting

Definition of the indicators to be adopted.

Choice of the calculation tool (For example: Excel?, Access?, Business Intelligence?,
etc.).
t ) The
Th tool
t l should
h ld beb aligned
li d withith the
th corporate
t IT system
t andd constantly
t tl
updated .
Appointment of persons, each taking the responsibility of one or more indicators.
D fi iti off targets
Definition t t for
f each h indicator.
i di t
Periodic status reports on indicator trends by the above persons.
Gap analysis and definition of improvement actions.
Follow up on improvement actions.
Participants:

• Purchase Manager
• Production Manager
• Sales Manager
• Marketing Manager
• IT Manager
• Supply Chain Manager
 48
The Logistics Meeting Reporting System (1)
Customer Service Trend

target

target

target
The Logistics Meeting Reporting System (2) 49

Company Inventory Turns

7.000.000
14

6.000.000
6.265.614
6.128.829 5.991.022 12

5.000.000
10
ost) value

4.000.000
8

target
(Std co

3.000.000 IT target
6
2.033.180 1.965.326
2.000.000 1.946.916 4
3,1 3,1
31
3,1
1.000.000 2

0 0
01/01/2002 - 31/12/2002 01/06/2002 - 31/05/2003 01/07/2002 - 30/06/2003

Period

Usage Avg stock IT

 50
The Logistics Meeting Reporting System (3)
Supplier Service Trend

target

target
 51
Assignment 02-05

See Case Study Attila in attached file.

Assignment 02-06

You want to measure your customers satisfaction.

Prepare a questionnaire to measure the customers satisfaction.
You choose the business and the company type.
 52
References

Logistics KPI – Slides.

Introduction to Materials Management, Tony Arnold – Chapters 9-10-11.
O
Operations
i M
Management, Ni
Nigell Sl
Slackk – Chapters
Ch 12
12.