Urgent'' logistics articles' high score!

World-class companies have deviated from the method of measuring logistics performance by analyzing simple functional indicators. They always formulate and deploy logistics strategies from the perspective of the company as a whole and the supply chain, measure and control logistics performance through the performance of the company in the channel alliance, and supervise the distribution of logistics resources.

First, the definition of performance management

As the name implies, performance management is to solve the problem of effectively creating value for intangible assets, aiming at the management of knowledge, skills and people. Performance management is not only a typical enterprise human resource management problem, but also a very important organic part of strategic management.

Performance management emphasizes the monitoring of the process, and ensures the realization of strategic objectives through the observation and evaluation of various indicators in the process of action. This is not management by objectives, but fact management (MBF). Therefore, with the emergence of performance management, enterprise strategy is no longer the task of a few people at the decision-making level, but a matter from CEO to every employee.

Second, the conceptual framework of performance management

At present, the widely used performance management framework is mainly key performance indicators (KPI). Balanced Scorecard (BSC) is not widely used in China, especially in logistics and logistics-related enterprises in China.

The essence of KPI is to point out that the setting of enterprise performance indicators must be linked with enterprise strategy, and the meaning of the word "key" refers to the most important problem to be solved in a certain stage of enterprise strategy. For example, in an enterprise with extraordinary growth, the rapid growth of business has brought about the rapid expansion of organizational structure, the expansion of staff, the shortage of management and skills, and the imperfection of processes and norms have become the main problems that restrict enterprises from effectively coping with high growth. Solving these problems has become the key point of strategic significance for enterprises at this stage, and the performance management system must design management indicators to solve these problems accordingly.

According to Herzberg's "incentive-health care" theory, we can divide the existing KPI indicators into coordination, control and incentive. The coordination and control part refers to the direct interaction between the top management and the department (including the rigor of the process, the allocation of time, the management focus, etc.). ), generally including "human resources plan/process", "financial control and plan/process" and "operational control and plan/process", which can be directly measured by evaluation results; And "reward", "opportunity" and "values and beliefs" belong to the incentive part, which refers to the clear incentive measures taken by the senior management to motivate the overall management team, and it is generally not easy to evaluate.

Third, the current performance management of logistics enterprises in China? Weak goals, less feedback, and basically no reward and punishment management.

China logistics enterprises have a strong correct concept of enterprise mission and organizational structure, but they are more interested in controlling and coordinating performance with operational control and financial control, and rely more on value demands to motivate employees.

Therefore, enterprises often rely heavily on the promotion of corporate values (such as "becoming an industry leader" and "being loyal to the enterprise"), which is manifested in the form of hanging photos and slogans of leaders and singing company songs to create an atmosphere to motivate employees, while rarely using the strategy-based performance management system commonly used by American enterprises.

China logistics enterprises are obviously poor in management ability and strictness, especially in the following aspects:

Target setting

Provide clear performance management feedback.

Implement real rewards and punishments for excellent/poor performance.

China logistics companies rely too much on business control and value incentives.

Lack of savvy and mature managers who are proficient in finance

Seldom use incentive mechanism/development opportunities to attract/retain excellent employees, and may suffer failure in the "talent war"

As long as practical and reasonable methods are adopted, management can also be significantly improved. So how does it work?

According to the organizational setup of logistics enterprises in China, the orientation of logistics organization and the best practices of foreign logistics companies, the management of logistics performance is best based on the logistics capability, the sensitivity analysis of supply chain cost and end customer satisfaction, and the performance evaluation of the company in the logistics department. The specific KPI measurement system can be composed of two parts: supply chain logistics capability evaluation and company logistics performance evaluation.

Fourthly, the setting of supply chain KPI.

1) Supply chain unification

Efforts should be made to unify and coordinate the operation of supply chain and the satisfaction of end customers, requiring logistics specificity, benefit sharing and emphasizing the connection of logistics channels;

2) Information technology

Information technology is the application of hardware, software and network to improve logistics information, emphasizing variability and integration.

3) Information sharing

The desire to exchange logistics strategic and tactical data between information sharing functional departments and supply chain partners emphasizes the form and proportion of logistics and financial information sharing.

4) Connectivity

Connection is about the ability to exchange and apply information.

5) standardization.

Standardization is constantly looking for the ability to apply logistics practices among organizations, and the demand is consistent with industry standards.

6) Simplify

Reduce the complexity of logistics processes and relationships.

7) Discipline (discipline)

Achieve a high degree of standardization and simplification, and pursue the same operating principles and procedures.

Five, the company's logistics performance appraisal

1, logistics cost evaluation

After the logistics department becomes a profit center independently, the logistics cost assessment is more directly linked with the product division or the sales department to assess the logistics cost incurred by the product division or the sales department. The most direct measure of a company's logistics performance is the logistics cost rate.

Logistics cost rate. Logistics cost rate = annual total material cost/annual sales. The logistics cost here is the real cost of completing a specific logistics activity. Logistics costs included by enterprises are transportation costs and operating costs of distribution centers. Because there is no standard statistics and cost division, many hidden logistics costs are classified as production costs and sales costs. Scientific logistics cost should be based on logistics activities, and all costs related to completing logistics functions should be included in activity-based cost classification.

Typical logistics costs can be divided into transportation costs and inventory costs.

Logistics cost statistics

1.) Transportation cost

L transportation cost

Factory to customer freight

Short barge fee from factory to distribution center

Long-distance transfer fee from factory to distribution center

Distribution cost from distribution center to customer.

All kinds of railway freight and miscellaneous fees

L cargo insurance

Cargo insurance cost

2.) Inventory cost

Shortage cost (the general calculation standard is that the shortage cost is 25% of the cost of developing a customer)

Inventory capital occupation (finished products, raw materials)

Depreciation expense of logistics equipment

Product obsolescence loss

Storage insurance premium

Warehouse labor cost

godown rent

Inventory tax

carriage expense

parcel

1, inventory turnover rate

Inventory turnover rate = annual sales/average inventory level

The higher the inventory turnover rate, the better the product sales and the less the funds occupied by the inventory. Taking food enterprises as an example, according to the sales data and inventory data of domestic food enterprises in 2002, the current inventory turnover rate of enterprises is around 50, which has reached a high turnover level. In the future organization, the main appraisal object of inventory turnover rate should be the product department.

2. Customer service level

Customer service level is mainly aimed at the evaluation index of product division or sales department.

L order satisfaction rate

Order satisfaction rate = the number of times the existing inventory can satisfy the order/the total number of times the customer orders.

That is, the existing inventory can meet the order proportion for the goods needed in the customer's order. The inventory of each distribution center should reach 95% satisfaction rate. However, it is difficult to achieve this ratio when the distribution center replenishes the inventory by transferring goods. According to the investigation conclusion of Meizhi Company, the average inventory availability rate in East China is only 80%, which has been running well in all regions, and the average inventory availability rate in West China is even less than 50%.

Consistency of order and delivery. The consistency of order and delivery is considered to be the most important factor in production enterprises and service enterprises. The main operating index is error-free delivery rate.

Error-free delivery rate = the number of deliveries according to customer orders in the current month/the total number of deliveries in the current month.

In practice, we should ensure that we can deliver the goods correctly according to the customer's order. In the investigation, we also know that this is what customers are most concerned about, so not delivering goods according to customers' orders will cause the greatest damage to the service image of enterprises. Therefore, before delivery, it is necessary to repeatedly check whether the delivered goods meet the customer's requirements according to the customer's order. From this point of view, it is very necessary for enterprises to set up the position of order manager in distribution center. It will greatly improve the company's service level to have a special person to track, ensure the delivery and accuracy of orders from the source and reduce the probability of order errors.

L timely delivery rate. Timely delivery rate = number of cars delivered on time in the current month/number of cars delivered in the current month.

At present, the delivery time of many products can reach short-distance next-day delivery. The solution is to establish a regional distribution center to directly transport the first-class wholesalers and second-class wholesalers who have the ability to pick up the whole vehicle in key cities and regions, and to establish a second-class distribution center in other provinces in the region to support the deep distribution strategy in counties, townships and towns for smaller batch distribution.

Damage rate of goods.

Damage rate of goods = value of damaged goods in the current month/total value of goods sent in the current month.

This index is used to measure the damage rate of goods in the process of distribution to customers. Generally, the maximum limit is 5%, and many cases of breakage occur during the loading and unloading of goods. At the peak of shipment, there is not enough loading and unloading force, which leads to slow delivery speed and high breakage rate. The suggested solution is to rent a forklift at the peak of shipment in the sales season to reduce the breakage rate and improve the loading and unloading speed.

L number of complaints. The carrier helps the enterprise deliver the goods to the customers, so the carrier represents the service image of the enterprise in the process of delivering the goods to the customers. Providing as many services as possible in this process will improve customers' loyalty to the enterprise, but the most common complaint of the distribution center is that the service is not in place in the process of delivering goods to customers. In response to customer complaints, our suggestion is that enterprises should refine the service agreement with carriers, and clearly provide basic services such as helping to unload goods, notifying customers before arrival, collecting and returning goods, and possible future payment collection.