Based on the findings of what is being measured, most of the emphasis in logistics
measurement is directed at activities internal to the firm. Still, many firms are not even
capturing key measures of internal logistics performance. Many firms that are
capturing logistics measures perceive their quality to be deficient. The lack of
availability of accurate, timely, and actionable information seems to be blamed on the
absence or incompatibility of IT systems and lack of organizational resources. Perhaps,
in those firms, a strong case has not yet been made for the business value of improved
logistics measurement. A case, or mandate, needs to be made to elevate the priority of
logistics measurement capability within the firm, and between firms, to achieve
organizational goals. Logistics planning and control systems cannot be effective
without measurement. The firm’s attention on internal utilization, productivity, and
cost measures is necessary but not sufficient for improved supply chain performance.
The firm needs to define the appropriate measures of its inter-firm processes. Trading
parties need to work together to define terms and processes of importance to the
relationship, and jointly agree on what is measured for comparison to desirable targets
for performance. The research suggests that this is not being widely done, but those
trading partners that do it enjoy mutual benefits.
It was evident from the case studies that two capabilities distinguished those firms
who were more advanced in logistics measurement, both internally and with trading
partners. These capabilities were the use of activity-based costing and data
warehousing. Having these capabilities permits the development of cost-to-serve
measures, which, when compared to the customer’s value of service, points to more
profitably engineered activities and services.