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For 25 years leaders in academe and industry have enthused about logistics as the great integrating corporate authority, underpinned always by information. Yet, in this quarter-of-a-century, few serious studies have attempted to analyse exactly how the logistics activity can be measured as a whole--its component parts are typically studied alone.
In October 1985 a seminar was held on "Performance Indicators in Logistics" by The Netherlands Association for Logistics Management (NEVEM). A model was presented whereby performance could be measured, and over the next few years it was put to the test in several companies.
One finding was that, while much of the data necessary for performance measurement existed in companies, the data needed structuring. During the course of further study, other aspects emerged which were found to be important. The results of this ongoing research have now been collected and published 1!.
THE CONTROL CYCLE
Management has been defined as the planning, execution and control of goal-directed activities. Control processes are implemented in this in the form of control cycles. A schematic example of a control cycle is shown in Figure 1. (Figure 1 omitted.) On the one hand, the essential stages of the control cycles are reflected, and on the other, the conditions that are necessary for implementation of the control cycle are shown.
The information flows required for logistic control must take shape in the organization in such a manner that a consensus is reached over the information flows necessary for a well functioning control cycle. Logistic performance indicators need, if well applied within the organization, to be part of such a control cycle and need linking to the control processes in the logistic management. The principle of a control cycle for controlling a process is described with reference to a number of stages that have to be completed. These are respectively:
* Description of the process. Description and identification of the process for which the control cycle is representative. This also implies the indication of the boundaries.
* Data collection. Measurement and registration of the process data; explicit registration procedures and instruments are necessary.
* Transformation to performance indicators. In this phase, the results of the measurements are changed into usable information. In order to obtain good interpretations, this implies that one...