Evaluating A Logistics Company

Companies require evaluating their logistics processes to assess achievements

and to improve their weaknesses. Stantler & Kilger (2005) state that each company is
evaluated according to its needs; however, there are some common aspects to present as
key performance indicators for evaluating them, such as: delivery, performance, supply
chain responsiveness, assets and inventories in which costs are influenced by its
performance (p. 53). Measuring these key aspects permit to recognize how each logistic
process is taking place into the company.
Stantler & Kilger (2005) define the following Key Performance Indicators for
evaluating a logistics process, 53- 61.

KEY PERFORMANCE INDICATORS

By Stantler & Kilger
It measures the total supply chain performance. It evaluates data from
Delivery
previous data and compares with actual data. It evaluates delivering the
Performance
right product, at right place, and right time.
It measures how an order is fulfilled from the stock in time and
quantity.
Order Fill Rate Orders shipped within 24 hours.
Orders delivered on or before the date
On time delivery
requested by the customer.
Service Level
Orders expected to be supplied in future
Forecast accuracy
demands.
It measures customer’s point of view, the time
Order lead-time from the date the order is placed to the date the
customer receives the shipment.
It measures the ability of the complete supply chain to react in the
marketplace according to changes, answers to an appropriate time,
Supply Chain speed in adaptations, flexibility within the system, and entire supply
Responsiveness chain structure.
It is the time taken from the beginning and
Planning cycle time
ending of a planning process in a company.
It measures the efficiency of a company
Asset turns operating its assets by specifying sales per
asset.
It measures the ratio of total material
Inventory turns consumption per time period over the average
inventory level of the same time period.
It measures the demand between two
Assets and
Cycle stock consecutive production operations of the same
Inventories
product.
It measures the reduction of fixed costs by
transporting goods. It depends on the right
Transportation of transportation, lot- size, places to transport
stock from one place to another, the capacity of the
transport unit used, and the coordination with
the inflow and outflow of goods in the

Inventory in transit
Seasonal stock
Work- in- process
Safety stock
Table 2. This chart presents indicators to evaluate a company logistic process. It is
suggested by Stantler & Kilger
warehouse.
It measures the time and demand of stock in
different points of transportation from one
place to another.
It measures the capacity to respond for future
demands with production capacity, overtime
capacity and seasonal stock.
It’s the time taken during raw materials and
components are transformed to finished
products.
It establishes the stock to answer from
unknown demand or uncertain supplier lead
times.

In order to assess the company’s performance, surveys or questionnaires are

used to collect data about key performance indicators to determine the logistic process.
Following our Blue Cookies example, read the indicators applied in the questionnaire
and the answers according to its performance. Data is taken from the previous reading.

BLUE COOKIES
Key Performance Indicators
Dear Customer
In order to evaluate our logistics performance and further improve our services, we
would appreciate if you could spend a few minutes of your time to answer the below
questions and give us your valuable input. Tick ( √) each indicator with one answer.

1- Delivery Performance

Products are 1 2 3 4 5
delivered according Poor-Very Dissatisfied Not sure/ Satisfied Excellent–
to the Purchase Dissatisfied Ambivalent Very
Order, the right Satisfied
place, and right time

2- Service Level
Order Fill Rate
Purchase orders are 4 2 3 1 5
shipping at right Satisfied Dissatisfied Not sure/ Poor-Very Excellent–
time, place and order. Ambivalent Dissatisfied Very
Satisfied

On time delivery
Orders delivered on 5 4 3 1 2
or before the date Excellent– Satisfied Not sure/ Poor-Very Dissatisfied
requested by the Very Satisfied Ambivalent Dissatisfied
customer.
Forecast accuracy
Orders delivered on 5 4 3 1 2
or before the date Excellent– Satisfied Not sure/ Poor-Very Dissatisfied
requested by the Very Satisfied Ambivalent Dissatisfied
customer.

Order lead-time
Time for delivering 2 5 1 4 3
the order and Dissatisfied Excellent– Poor-Very Satisfied Not sure/
receiving the Very Dissatisfied Ambivalent
shipment. Satisfied

3- Supply Chain Responsiveness

Planning cycle time
Time taken from 5 2 4 3 1
the beginning and Excellent– Dissatisfied Satisfied Not sure/ Poor-Very
ending of a Very Satisfied Ambivalent Dissatisfied
planning process in
a company.
4- Assets and inventories
Asset Turns
Company’s 3 5 4 1 2
efficiency and sales Not sure/ Excellent– Satisfied Poor-Very Dissatisfied
asset. Ambivalent Very Satisfied Dissatisfied

Inventory turns
Ratio of total 1 4 5 3 2
material Poor-Very Satisfied Very Not sure/ Dissatisfied
consumption Dissatisfied Satisfied Ambivalent

Cycle stock
Demand of two 2 1 4 5 3
consecutive Dissatisfied Poor-Very Satisfied Very Not sure/
production Dissatisfied Satisfied Ambivalent
operations

Transportation of stock
Reduction of costs 3 5 4 1 2
by transporting Not sure/ Very Satisfied Satisfied Poor-Very Dissatisfied
goods. Required Dissatisfied

Inventory in transit
Transportation of 4 2 1 3 5
stock from one Adequate Inadequate Poor-Very Not sure/ Very
place to another Inadequate Adequate

Seasonal stock
Capacity for future 2 5 3 1 4
demands with Inadequate Very Not sure/ Poor-Very Adequate
production capacity, Adequate Inadequate
overtime capacity
 and seasonal stock

Work- in- process

Capacity for future 3 5 4 1 2
demands with Not sure/ Very Adequate Poor-Very Inadequate
production capacity, Adequate Inadequate
overtime capacity
and seasonal stock

Safety stock
stock to answer 5 4 3 2 1
from unknown Very Adequate Not sure/ Inadequate Poor-Very
demand or Adequate Inadequate
uncertain supplier
lead times.

Thanks for helping us to improve!

Blue Cookies Technologist Team

BLUE COOKIES
Key Performance Indicators

Dear Customer
In order to evaluate our logistics performance and further improve our services,
we would appreciate if you could spend a few minutes of your time to answer the below
questions and give us your valuable input.
Best regards,
Francisco Javier Beltrán

5- Delivery Performance

Products are delivered 1 2 3 4 5

according to the Poor-Very Dissatisfied Not sure/ Satisfied Excellent
Purchase Order, the Dissatisfied Ambivalent – Very
right place, and right Satisfied
time

6- Service Level
Order Fill Rate
Purchase orders are 4 2 3 1 5
shipping at right time, Satisfied Dissatisfied Not sure/ Poor-Very Excellent–
place and order. Ambivalent Dissatisfied Very
Satisfied
On time delivery
Orders delivered on or 5 4 3 1 2
before the date Excellent– Satisfied Not sure/ Poor-Very Dissatisfied
requested by the Very Satisfied Ambivalent Dissatisfied
customer.

Forecast accuracy
Orders delivered on or 5 4 3 1 2
before the date Excellent– Satisfied Not sure/ Poor-Very Dissatisfied
requested by the Very Satisfied Ambivalent Dissatisfied
customer.

Order lead-time
Time for delivering the 2 5 1 4 3
order and receiving the Dissatisfied Excellent– Poor-Very Satisfied Not sure/
shipment. Very Dissatisfied Ambivalent
Satisfied

7- Supply Chain Responsiveness

Planning cycle time

Time taken from the 5 2 4 3 1

beginning and Excellent– Dissatisfied Satisfied Not sure/ Poor-Very
ending of a planning Very Satisfied Ambivalent Dissatisfied
process in a
company.

8- Assets and inventories

Asset Turns
Company’s 3 5 4 1 2
efficiency and sales Not sure/ Excellent– Satisfied Poor-Very Dissatisfied
asset. Ambivalent Very Satisfied Dissatisfied

Inventory turns
Ratio of total of 1 4 5 3 2
material Poor-Very Satisfied Very Not sure/ Dissatisfied
Dissatisfied Satisfied Ambivalent

Cycle stock
Ratio of total of 2 1 4 5 3
material Dissatisfied Poor-Very Satisfied Very Not sure/
Dissatisfied Satisfied Ambivalent

Transportation of stock
Reduction of costs 3 5 4 1 2
by transporting Not sure/ Very Satisfied Satisfied Poor-Very Dissatisfied
goods. Required Dissatisfied
Inventory in transit
Transportation of 4 2 1 3 5
stock from one place Adequate Inadequate Poor-Very Not sure/ Very
to another Inadequate Adequate

Seasonal stock
Capacity for future 2 5 3 1 4
demands with Inadequate Very Not sure/ Poor-Very Adequate
production capacity, Adequate Inadequate
overtime capacity
and seasonal stock

Work- in- process

Capacity for future 3 5 4 1 2
demands with Not sure/ Very Adequate Poor-Very Inadequate
production capacity, Adequate Inadequate
overtime capacity
and seasonal stock

Safety stock
stock to answer from 5 4 3 2 1
unknown demand or
uncertain supplier Very Adequate Not sure/ Inadequate Poor-Very
lead times. Adequate Inadequate

Please evaluate our logistic performance according to product delivery

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