Measuring Logistics Structure

Abstract

Companies generally monitor their logistics performance extensively. This monitoring has increased during the last 10 years, but is still carried out on largely an operative level, recording efficiency and performance within and between operational units. The purpose of such measuring is to monitor the day-to-day running of the business and the continuous fine tuning of operations. During the past decade there has been a trend towards increased internationalisation of multinational companies, where domestic set-ups both on the supply and the market side have been replaced with regional and even global systems for distribution, sales, production etc. As a consequence, the logistics has changed from a local cost–oriented approach to a global systems approach, which demands models for measuring logistics performance on a structural level. A conceptual model is presented for measuring logistics structures based on a total cost analysis in combination with a methodology similar to activity-based costing. The model has been used in several distribution restructuring programmes, both as a simulation tool to define a new structure, as well as a reference mark in the change process itself.