We support

companies in creating
more value for their
customers

Supply
pp y Chain Keyy Performance Indicators

GC&P Performance Measurement System (LOGOS)

Logistics Costs

Supplier Service Analysis

Vendor Rating

Suppliers

WH
RM

Cross
CrossAnalysis
Analysis

Factory

OEE Analysis
A l i
OLE Anlaysis
Flow Index

Customer Service Analysis

WH
FP

Customers

Customer Service: Order Line Dates

Date
Received

Date
Entered

Date
Required

Date
Promised

Date of Last
Shipment

Time

Customer Waiting Time

FLEX
Delay

Order Lead Time

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

Customer Waiting Time Curve

Flexibility Curve
12000

2500

Line N

1500
1000

10000

To be flexible is fine, but only if the service

policies are shared with customers. Should
the Flex curve be erratic, it might be
disastrous for the company!

8000
Line N

A CWT Curve like this is almost

impossible (one-item-only companies).
But it could show more peaks as related
to the product ranges.

2000

6000
4000

500

2000

9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81

9 10 11 12 13 14 15 16 17 18 19

Days of Flexibility

Days of Customer Waiting Time

Re liability Curv e

Order Lead Time Curve

3500

2000
3000

1800
1600

2500

Line N

1500

The OLT curve shape is affected by

the trend of the other three curves.

1200
1000
800
600

1000

400
200

500

0
1
Days
y of Delay
y

69

59

49

43

35

31

27

23

19

15

11

-1

-5

-9

0
-3
6

LineN

1400
2000

5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89

Days of Lead Time

Customer Service A Real Example of Reliability Curve

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.

Customer Service: Files and Data Needed

Customer Database
Customer Code
Company Name
F t 1 (Country)
Feature
(C
t )
Feature 2 (Area)
Feature 3 (Category)
Feature 4 (Etc.)
Order Lines
Order Number
Order Line Number
Order Date
Required Delivery Date
Confirmed Delivery Date
Order Line Quantity
Customer Code
Item
Plant Code
Warehouse Code
Note 1 (Order Type)
Order Not Completed (Y/N Flag)
Order Cancelled (Y/N Flag)

Item Master File

Item Code
Description
Pl t Code
Plant
C d
Standard Cost
Lead Time
Unit of Measurement
F t 1
Feature
Feature 2
Feature 3
Feature 4 (Etc.)
Shipment Lines
Plant Code
Warehouse Code
Shi
Shipment
N b
Number
Shipment Line
Order Number
Order Line Number
Shi
Shipment
D
Date
Quantity Shipped
Note: All the data in the above lists can be retrieved from anyy information
system.

Customer Service Some Tips to Consider

The fundamental service measurement indicators are:

Reliability Curve

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?)

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.

10

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?

11

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))

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.

13

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 inhouse, 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 order
d cost, production
d i controll costs, set up costs))
Stockout costs: if demand during the lead time exceeds forecast we can expect a
stockout

Inventoryy Management
- Introduction
g
Need of inventory measurement tools.
tools
Need of inventoryy management
g
policies.
p

TO MAKE
DECISIONS
ABOUT

WHEN TO ORDER?
HOW MUCH TO
ORDER?

IN ORDER TO PROVIDE
THE REQUIRED
CUSTOMER SERVICE

15

16

Cross Analysis
y Steps
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
Class
A

Class
B

Class
C

Class
D

Cl A

STOCK

USAGE
STOCK
Class
A

Cl
A

Class
B

Class
C

Class
D

Cl B
Cl C
Cl D

Cl
B

Cl
C

Cl
D

Cross Analysis A Real Example (FPs)

Stock
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

Usage
g

T t l
Total

17

18

Inventory Turns and Days of Supply

Inventory
Turns

6,050,471
6 050 471

Annual FP Shipped

Total Average Stock

Turns / Year

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.

Days of
Supply

Total Average Stock

Average Daily Shipments

1.506.061
16.577

90

Calendar Days
(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
Part Number
Plant Number
Warehouse Number
Quantity on Hand
Date
WH Transaction File
It Number
Item
N b
Plant Number
Warehouse Number
Transaction Type
Quantity Handled
Transaction Date

Item Master File

Part Number
Description
Plant Number
Standard Cost
Feature 1 (Part Type)
Feature 2 (Category)
Feature 3 (Family)
Feature 4 (Etc.)
WH Transaction type file
Transaction Type
yp
Description
Plant Number
Warehouse Number

Note: All the above data can be retrieved from any information system.

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 .

20

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?

21

Manufacturing Lead Time Introduction

22

c
= Shop
Sh Floor
Fl
= Work Center

RM

= Stores

FP
b
a

Single
g Lead Time
Start

End

Routing
Flow Curves /
Distribution Curves

Cumulated Lead Time

a

STD Time

Flow Index

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

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.

Wait

24

Manufacturing Lead Time Flow Curves

Kg
g
Load

WIP/Backlog
Lead Time

Unload

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.

Manufacturing Lead Time The Flow Index

FI =

Lead Time
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

25

Manufacturing Lead Time A Flow

I d C
Index
Calculation
l l i E
Example
l
Seq
u.
15
20
25
30
35
40
45
50
55
60
TOT

p
Description
Hydraulic Presses
Preparations
Automatic welding
Manual welding
Turning
Drilling and riveting
Intermediate check
El t h
Electrophoresis
i plant
l t
Transit
Final check

Avg
LT
7,6
6,4
10,0
5,7
5,8
3,7
3,5
29
2,9
1,8
3,9
51,0
a

RT min
55
18
44
38
120
137
12
76
0
12
512

FI = a / b = 47.8

RT
d
days
0,115
0,038
0,092
0,079
0,250
0,285
0,025
0 158
0,158
0,000
0,025
1,067
b

Avg Lot
size
i
(pcs)
(
)
76
89
8
14
39
10
8
8
0
6

LRT
min
i
4.201
1.605
334
549
4.681
1.404
96
611
0
69
13.550

LRT
d
days
9
3
1
1
10
3
0
1
0
0
28
c

26

Manufacturing Lead Time Files and Data

Needed
Work Center Master File

Item Master File

Work Center Number

Description

Part Number
Description
Plant Code
standard Cost
Lead Time
Unit of Measurement
Feature 1 (Part Type)
Feature 2 (Category)
Feature 3 (Family)
Feature 4 (Etc.)

Routing File
Part Number
Work Center Number
Sequence
Run Time
Setup Time

Shop Order Master File

Shop Order Number
Part Number
Order Quantity
Q ntit Completed
Quantity
C mpl t d
Quantity Scrapped
Balanced Due
Shop Order Date
Shop Order D
Duee Date
Completion Date

Shop Order Detail File

Shop Order Number
Part Number
Operation Number
Actual Setup Time
Actual Run Time
Initial Date
Finish Date

Note: The data needed for Manufacturing Lead Time measurement are normally available in companies
that have a Shop Floor Data Collection System.
System

27

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:

Layout

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

Planning and control tools

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

28

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)

Ex: (480 m - 60 m) = 420

Available time

Availability ratio: (Available time

Working Time

Setups
Breakdowns
Startup

Downtime/Available time)
Ex: (420 m - 30 m) / 420 m = 92,9%
92 9%

Efficiency
Net Working
Time

ratio:

Time

total

production/working time)

Minor Stoppages
Reduced Speed

Ex: (0,6m/units X 358 units) / 390 m = 55,1%

Quality ratio: (total

Real
Time

(Run

Defects

production defects)/Total

production
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%

93%

35%

99%

97%

100%
90%

86%
30%

80%

79%

29%
27%

% cum

70%

23%

25%

Losses Analysis

60%

56%
20%

50%
40%

15%

30%

29%
10%

7%

6%

20%

4%

5%

2%

10%

1%

0%

0%
Cambio Bobina e
setup

Regolazione e
verifica taratura
tecnica

Fermo macchina
per avaria

Manutenzione
Ordinaria

Mancanza qualit
Mancanza
stampa
alimentazione da
stampante

TPM

Addestramento

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)

Attivit

STAMPAGGIO

Ore

Peso%

TempoT
ot

OEE

19.949

65,47%

30.471

Mancanza Personale
Mancanza Ordini
Prova Stampi
Cambi Stampo
Fermi Straordinari
Cambi Colore
Pausa Pranzo/Cena
Guasti Stampo (Almeno 10 Minuti)
Avviamento/Spegnimento Macchine

4.155
2.828
1.361
380
320
313
231
228
222

13,64%
9,28%
4,47%
1,25%
1,05%
1,03%
0,76%
0,75%
0 73%
0,73%

30.471

VERO

30.471

FALSO

30.471

VERO

Guasti Macchina (Almeno 10 Minuti)

201

Mancanza Stampo Da Officina

Pulizia (Gruppo Iniezione, Cilindro)
Mancanza Componenti
Regolazioni
Guasti Robot (Almeno 10 Minuti)
Materiale Difettoso
Pulizia Macchina
Pulizia Stampo
Prova Colori
Mancanza Attrezzisti
TOT PERDITE

VERO

30.471

VERO

30.471

FALSO

30.471

VERO

30.471

VERO

30.471

VERO

30 471
30.471

VERO

0,66%

30.471

VERO

77
64
47
47
26
13
4
3
2
1

0,25%
0,21%
0,15%
0,15%
0,09%
0,04%
0,01%
0,01%
0,00%
0,00%

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

30.471

VERO

10.521

34,53%

36

Efficiency Files and Data Needed

Work Center Master File

Item Master File

Shop Calendar

Work Center Number

Description

Part Number
Description
Plant Code
standard Cost
Lead Time
Unit of Measurement
Feature 1 (Part Type)
Feature 2 (Category)
Feature 3 (Family)
Feature 4 (Etc.)

Work Center Number

Week
Day
Shift
Workstation Code
Available Time

Shop Order Detail File

Waste Type File

Shop Order Number

Part Number
Operation Number
Actual Setup Time
Actual Run Time
Initial Date
Finish Date

Workstation Number
Waist Type
Operator
Item Number

Routing File
Part Number
Work Center Number
Sequence
Run Time
Setup Time

Shop Order Master File

Shop Order Number
Part Number
Order Quantity
Quantity Completed
Quantity Scrapped
Balanced Due
Shop Order Date
Shop Order Due Date
Completion Date

Shop Order Number

Quantity Completed
Q
Quantity
i Scrapped
S
d
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.

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.

37

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)

38

39

Supplier Service
Purchase
Requisition Date

Order Entry
Date

Date
Needed

Date
Promised

Date Received
Time

Paper cycle

Waiting time

FLEX

Reliability

Supplier Lead Time

Note: All the above data can be retrieved from any information system.

Supplier Service Files and Data Needed

Supplier Data Base
Supplier Number
Company
p y Name
Feature 1
Feature 2
Feature 3
F t 4
Feature
Purchasing Order File
Ord r Type
Order
Tp
Order Number
Order Date
Date Needed
Date Promised
Supplier Code
Item Number
Order Quantity
Unit Price

Item Master File

Part Number
Description
p
Plant Number
standard Cost
Lead Time
U i off Measurement
Unit
M
Feature 1 (Part Type)
Feature 2 (Category)
Feature 3 ((Family)
y)
Feature 4 (Etc.)
Goods Received File
Bill Number
Order Number
Order Date
Item Number
Receivedd Quantity
Date Received
Warehouse Number

Note: All the above data can be retrieved from anyy information system.
y

40

Supplier Service A Few Tips to Consider

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.

41

Vendor Rating

42

Logistics Costs

43

EBIT
P & L of the logistics
process
Operating Cost

General & Administrative

Expenses

Operations Cost

Logistic Cost

Inbound logistic Cost

Revenues

M
Materials
i l and
d
Subcontractors

Labor

Internal Logistic Cost

Overhead

Outbound Logistic Cost

44

Logistics Costs

Inbound Logistic Cost

1.

Internal Logistic Cost

Personnel
(purchasing, stores
& inventory
personnel)

1.

Warehouse
Equipment

2.

3.

Rents

3.

Rents

4.

Inbound
Transportation

4.

Inventory
Opportunity Cost

2.

5
5.

Inventory
Opportunity Cost

Personnel (planning
and control, stores
& inventory
personnel)
Warehouse
Equipment

Outbound Logistic Cost

1.

Personnel (customer
service, stores &
inventory personnel)

2.

Warehouse
Equipment
q p

3.

Rents

4.

Outbound
Transportation

5.

Distribution Centers

6.

Inventory
Opportunity Cost

Performance Measurement Reference Table

Indicators
Customer On-Time Delivery

Benchmark
> 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.

45

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-docheck-act).
h k )

Define coordinated improvement actions.

46

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 be
b aligned
li d with
ith 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

47

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

(Std co
ost) value

10
4.000.000
8

target
IT target

3.000.000

2.033.180

1.965.326

2.000.000

1.000.000

1.946.916
3,1

31
3,1

3,1
2

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

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.

51

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.

52