Control Systems for Logistics Performance

Virolainen, V.-M. (1991). Control Systems for Logistics Performance. IIASA Collaborative Paper. IIASA, Laxenburg, Austria: CP-91-003

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Abstract

This text is concerned with identifying and outlining the various aspects of logistics control and performance measurement process. The objective is to identify, based on available literature, methods and techniques which can be used to measure the performance of logistics.

Logistics management is essentially a task of balancing between minimizing cost and ensuring availability objectives. Availability can be seen as the output of logistics system. On the input side, management is concerned with minimization of costs caused by holding inventories, warehousing, transportation, production and administration of logistics activities.

Logistics control is normally directed toward two subjects: the control of logistics output or service level and the input of logistics system. Key objects of logistics control are: service level, inventory turnover, warehousing costs, transportation costs and administrative costs.

The logistics control systems involves setting goals and standards for performance, measuring performance, and taking corrective actions. Various methods such as productivity ratios, flexible budgets, standards, control charts, and audits, can be used to measure the performance of logistics activities.

The methods used to measure logistics activities usually provide a comparison to the past, not to the future. The nature of the problem in logistics is change. The focus must be to respond to change by projecting possible future system states. Control systems should assume possible future conditions in order to plan for response and to guide future decisions.

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