The critical factors of efficient controlling

Key indicators are also needed in logistics in order to efficiently carry out controlling. In designing the key-indicator system, consideration must be given to the fact that logistics is a cross-divisional function in the flow of goods. Traditional key indicators offer only limited help in evaluating the performance of the logistics system.

Measuring the efficiency of logistics systems

Key logistics indicators serve as measures of efficiency in logistics systems. They empirically depict observable and measurable circumstances. In formulating key logistics indicators, special aspects of logistics must be considered. Traditional key business indicators like productivity, capacity utilization, efficiency and profitability address these aspects only to a limited degree. This is because they are directed vertically at the cost center and not at the contract.
The logistics view is directed horizontally at the flow of goods and contracts, and requires key indicators that include the factor of time. As a result, a company must use a time-based system of efficiency measurement that complements the measurement approach based on input-output ratios. In this system, the measurement and presentation of the value-added contribution by individual functions and process steps are extended across the entire supply chain Supply chain .
A good system of key indicators has a hierarchical design that will meet the information needs of key-indicator recipients at various company levels. Global, aggregate key indicators are designed for logistics executives. By breaking down these key indicators into individual parts, figures that represent contributing factors to the global key indicators are shown [1].

Key indicators in the entire logistics system

The primary key indicators are frequently considered to be logistics costs and delivery service. These show logistics costs in terms of their absolute size, in terms of their distribution in the logistics subsystems of transport, warehousing, warehouse and order processing as well as in terms of their classification according to the phases of procurement, production and distribution. The phase-based classification clearly shows where a company’s logistics focal points are. As an output of the complete logistics system, delivery service is subdivided into the components of delivery time Delivery time , delivery reliability Delivery reliability , nature of delivery Delivery condition and delivery flexibility Delivery flexibility .
Another key indicator is the capital that is tied up in logistics. A distinction is drawn between capital tied up in fixed assets and working capital - that is, between the vehicle fleet, warehouse, warehouse equipment and average inventories that have a price-based value. To recognize a change, a company should simultaneously monitor both types of assets.
Another key indicator arises from logistics per sales unit. The share of logistics costs in revenue is frequently used as an indicator of logistics efficiency [1].

Key indicators in logistics management

Key indicators in logistics controlling

These key indicators place special emphasis on the managerial functions of “personal leadership,” “organization” and “planning.” The key indicators of logistics management are a necessary extension of the entire logistics system. They also facilitate the consideration of interrelationships with other operational subdivisions - particularly with the areas of procurement, production, sales, finance and purchasing.
The primary goal is to facilitate systematic thinking at the interfaces to the internal company operations.
Leadership in terms of personal influence on people primarily has an impact on a company’s human resources. These can be expressed through team spirit, conflicts, job satisfaction and motivation. Possible key indicators include the rates of employee turnover and missed work days.
In the absence of direct criteria, other measures can be used to judge how well suited the organization and planning are to support and ensure an efficient operation of logistics processes.
The central and measurable output of logistics management is the cycle time Cycle time . In a comparison with competitors, it shows the extent to which just-in-time Just-in-time systems are used. Throughput time is considered to be the period that an object takes to pass through a company. It applies to two aspects, real goods and the flow of payments driven by the exchange of real goods. The examination of both aspects prevents the focus from being directed solely at the flow of goods [1].

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