Blueprint for Success: Logistics
American Productivity & Quality Center, APQC, December 2006, Pages: 60
In the past, many organizations have viewed logistics activities mainly in terms of warehousing and transportation. Today’s executives are taking a much broader view, examining the logistics function as a strategic opportunity for process improvement, cost savings, and customer satisfaction. These latest benchmarking results illustrate the substantial effect top performance in logistics activities can have on these areas. This raises the questions of what can be learned from high-performing organizations to realize dramatic improvements in logistics and whether differences are due to industry-specific parameters or to the benefits of assimilating practices regardless of industry.
Traditionally, organizations have focused on back-office infrastructure for efficiencies in process, productivity, and cost. Now, organizations are beginning to view supply chain processes such as logistics as the keys to competitive advantage, realizing that logistics functions and supporting processes can profoundly impact an organization’s bottom line. Many organizations are implementing systems for measuring their logistics operations that allow them to identify, quantify, and focus their improvements.
While focusing on measurement and benchmarking performance is good, many organizations still fail to understand a fundamental point: Improvement in performance measurement is driven in large part by implementing improved processes. As such, this document goes beyond the information in most benchmarking reports to provide insights into the actual best-practice process enablers that are driving the results, in essence outlining a blueprint for success that organizations can follow to help set them ahead of the pack.
This Blueprint for Success series provides a road map for achieving best-practice performance in logistics. Included, you will find a framework for logistics activities and how they relate to the enterprise; key measures for executive, managerial, and operational views of performance; the latest benchmarks for performance; and in-depth case studies demonstrating how leading organizations have achieved their performance levels.
List of Figures 1
Logistics’ Strategic View 2
Process Classification FrameworkSM (PCF) 3
Key Performance Indicators 8
Benchmarks and Process Performance Drivers 12
Case Studies 27
Arrow Electronics, Inc 27
ATC Logistics & Electronics 30
Deere & Company 33
Office Depot Inc 37
Appendix 1
PCF Section 4 0 Deliver Products and Services 40
Appendix 2
Procurement Measures (PCF 4 2 1, 4 2 2, 4 2 3, 4 2 4) 43
Customer Order Management Measures (PCF 3 6, 4 5 5) 45
Logistics Measures (PCF 4 5 1, 4 5 2, 4 5 3, 4 5 4, 4 5 5) 47
Manufacturing Measures PCF (4 3) 49
New Product Development Measures (PCF 2 1) 50
Supply Chain Planning Measures (PCF 4 1) 51
Appendix 3
Open Standards Methodology 52
Appendix 4
Glossary of Terms 53
List of Figures
Figure 1
The PCF Overview 3
Figure 2
4 5 Logistics 4
Figure 3
Time and Resource Allocation by Logistics Process 5
Figure 4
Percentage of Orders Shipped on Time and Complete 13
Figure 5
Correlation Between Order Fill Rate and Inventory Accuracy 14
Figure 6
Customer Order Cycle Time 14
Figure 7
Customer Order Cycle Time Performance (Supplier On-Time Delivery) 15
Figure 8
Total Logistics Cost per $1,000 Revenue 15
Figure 9
Logistics Cost Breakdown 16
Figure 10
Total Logistics Cost per Order Shipped 17
Figure 11
Total Logistics Cost Performance to Warehouse Productivity 17
- Arrow Electronics, Inc
- ATC Logistics & Electronics
- Deere & Company
- Office Depot Inc
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