Logistics financial performance measures (e.g., expenses and return on assets )

Logistics productivity measures (e.g., orders shipped per hour and transport container utilization)

Logistics quality measures (e.g., inventory accuracy and shipment damage )

Logistics cycle time measures (e.g., in transit time and order entry time)

Logistics Resources has a tool called The Logistics Scoreboard that can be used to pilot supply chain performance measurement processes and to customize for ongoing use. It is prescriptive and recommends the use of a specific set of supply chain performance measures. These measures, however, are skewed toward logistics, having limited focus on measuring the production and procurement activities within a supply chain.

Activity-Based Costing (ABC)

The ABC approach was developed to overcome some of the shortcomings of traditional accounting methods in tying financial measures to operational performance. It involves breaking down activities into individual tasks or cost drivers and allocates various costs to these drivers. This approach allows better assessment of the true productivity and costs of a supply chain process. ABC analysis does not replace traditional financial accounting, but provides a better understanding of supply chain performance by looking at the same numbers in a different way. ABC methods are useful in conjunction with the other measurement approaches to measure supply chain process/task productivity and costs by aligning the metrics closer to actual labor, material, and equipment usage.

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* Contributed by -
Krishnakanth K. K. & Pankaj Ghai,
PGP Students.
IIM Lucknow.