{"57652":{"#nid":"57652","#data":{"type":"news","title":"Supply Chain Strategy Focus Group Explores Development of Key Performance Indicators","body":[{"value":"\u003Cp\u003EATLANTA, October 1, 2002 - The Logistics Institute (\u003Ca href=\u0022http:\/\/www.tli.gatech.edu\u0022 target=\u0022_blank\u0022\u003Ewww.tli.gatech.edu\u003C\/a\u003E) at Georgia Tech is pleased to announce the results of a supply chain strategy focus group that included representatives from 29 companies.  The focus group, conducted as a part of the Logistics Management Series of courses at The Logistics Institute, examined the following four key issues in logistics and supply chain management:\n\u003C\/p\u003E\n\u003Cp\u003EA) Data Requirements and Activity Profiling for Reverse Logistics Planning\u003Cbr \/\u003E\nB) Logistics Performance Indicators\u003Cbr \/\u003E\nC) Criteria for Differentiating Customers for Customer Service Policy Development\u003Cbr \/\u003E\nD) Supplier Selection Criteria\n\u003C\/p\u003E\n\u003Cp\u003EDr. Ed Frazelle, director of The Logistics Institute\u0027s (TLI) Logistics Management Series and president of Logistics Resources International\u003Cbr \/\u003E\n(\u003Ca href=\u0022http:\/\/\u0022 target=\u0022_blank\u0022\u003Ewww.LRILogistics.com) facilitated the supply chain strategy focus group. The focus group included representatives from Cargill, Case, Celiant Corporation, Clorox Products Manufacturing Company, Corporacion Supermercados Unidos, C-P Flexible Packaging, Defense National Stockpile Center, Diageo, FedEx Supply Chain Services, Grainger, JMAC Consiel S.p.A., Kohler Company, NCR Corporation, Newark Electronics, Office Depot, RBX Industries, Russell Athletic, Schneider Logistics, Team S.A., Thomas \u0026amp; Betts, Tiffany \u0026amp; Company, Transentric, U.S. Army Forces Command, U.S. Department of State, U.S. Marine Corps Material Command, U. S. Department of State, Vaisala, Vistakon, and XonTech, Inc. The focus group concluded with the following findings:\n\u003C\/a\u003E\u003C\/p\u003E\n\u003Cp\u003EA) \u003Cstrong\u003EData Requirements and Profiles for Reverse Logistics Planning\u003C\/strong\u003E\u003Cbr \/\u003E\n According to Dr. Frazelle, \u0022Reverse logistics planning is more difficult than traditional logistics planning because there are minimal to no predictable or consistent data sources describing the reverse flows.\u0022  The focus group members were asked to think creatively about the data requirements for reverse logistics planning. The main purpose for the profiling activity was to identify particular customers, SKUs, suppliers, carriers, and\/or salespersons that generate disproportionate shares of returns activity. Some of the culprits were recorded as:\u003Cbr \/\u003E\n1. Customer Returns Activity Profile to identify if particular customers or categories of customers generate a disproportionate share of returns.\u003Cbr \/\u003E\n2. SKU Returns Activity Profile to identify the particular SKUs and types of SKUs that generate the majority of returns.\u003Cbr \/\u003E\n3. Supplier Returns Activity Profile to identify the particular suppliers who provide SKUs that generate a high return rate.\n\u003C\/p\u003E\n\u003Cp\u003EB) \u003Cstrong\u003ELogistics Performance Measures\u003C\/strong\u003E\u003Cbr \/\u003E\n\u0022Developing and implementing a logistics performance measurement program with appropriate performance targets for each metric is perhaps the fastest, simplest, and least expensive means of raising total logistics performance. If we can get the right metrics in place, we will yield the right behaviors,\u0022 said Dr. Frazelle. The focus group members developed and ranked a list of key logistics performance indicators in terms of their usefulness in monitoring total logistics performance. Some of the main performance indicators listed by the focus group include: 1. Perfect Order Percentage 2. On-time Delivery Percentage 3. Inventory Accuracy\n\u003C\/p\u003E\n\u003Cp\u003EC)\u003Cstrong\u003E Criteria for Customer Service Segmentation\u003C\/strong\u003E\u003Cbr \/\u003E\nAccording to Dr. Frazelle, \u0022Developing a customer service policy is the launching point for world-class logistics. One of the most difficult steps in developing a segmented customer service policy is creating the criteria upon which to segment customers into A, B, and C categories.\u0022 The top three criteria identified by the focus group for segmenting customers into service-level categories were: 1. Profitability - Profit percentage derived from serving the customer. 2. Sales Volume - Dollar and unit sales derived from the customer. 3. Growth Potential - An estimate of the customers\u0027 long-term growth potential.\n\u003C\/p\u003E\n\u003Cp\u003ED) \u003Cstrong\u003ESupplier Selection Criteria\u003C\/strong\u003E\u003Cbr \/\u003E\nDr. Frazelle stated, \u0022Once customer service performance targets have been developed, supplier selection criteria can be established to ensure the customer service policy can be executed reliably and without incurring excessive logistics costs. The supplier selection criteria helps to formalize the choice of suppliers to support the customer service policy and those same criteria become the report card metrics for monitoring supplier performance on an on-going basis.\u0022 The following are the top three items that appeared on the focus groups\u0027 list of supplier selection criteria: \n\u003C\/p\u003E\n\u003Cblockquote\u003E\u003Cp\u003E1. Total Logistics Cost to Receive\/PO Cost\u003Cbr \/\u003E\n2. Proximity\u003Cbr \/\u003E\n3. On-Time Delivery Percentage\u003C\/p\u003E\u003C\/blockquote\u003E\n\u003Cp\u003ETLI\u0027s focus groups are conducted as a part of its professional education programs.  Facilitated by Dr. Ed Frazelle, each focus group addresses key issues in supply chain strategy, inventory management, transportation management, world-class warehousing, global logistics, and third-party logistics.\n\u003C\/p\u003E\n\u003Cp\u003EComplete focus group results are available at \u003Ca href=\u0022http:\/\/www.tli.gatech.edu\/scfocusgroup\u0022 title=\u0022http:\/\/www.tli.gatech.edu\/scfocusgroup\u0022\u003Ehttp:\/\/www.tli.gatech.edu\/scfocusgroup\u003C\/a\u003E.\n\u003C\/p\u003E\n\u003Cp\u003EAbout The Logistics Institute\u003Cbr \/\u003E\nThe Logistics Institute (TLI) was established in 1992 to coordinate all logistics-related activities on Georgia Tech\u0027s campus.  TLI\u0027s Leaders in Logistics is comprised of more than 20 corporations and government agencies that partner with the Institute to fund research and educational programs. Through this partnership TLI focuses on logistics research, education, and practice, with an emphasis on supply chain design, transportation planning, and e-commerce logistics.\n\u003C\/p\u003E\n\u003Cp\u003EMedia Contacts:\u003Cbr \/\u003E\nYolanda Wilson\u003Cbr \/\u003E\nPR Specialist\u003Cbr \/\u003E\nGeorgia Tech Continuing Education \u003Ca href=\u0022mailto:yolanda.wilson@conted.gatech.edu\u0022\u003Eyolanda.wilson@conted.gatech.edu\u003C\/a\u003E 404-385-3547\n\u003C\/p\u003E\n\u003Cp\u003ETammy Artosky\u003Cbr \/\u003E\nLMS Program Director\u003Cbr \/\u003E\nThe Logistics Institute at Georgia Tech \u003Ca href=\u0022mailto:tammy.artosky@isye.gatech.edu\u0022\u003Etammy.artosky@isye.gatech.edu\u003C\/a\u003E 404-894-1713\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":"","field_summary_sentence":"","uid":"27279","created_gmt":"2003-10-01 00:00:00","changed_gmt":"2016-10-08 03:06:35","author":"Barbara Christopher","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2003-10-01T00:00:00-04:00","iso_date":"2003-10-01T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"groups":[{"id":"57458","name":"ISyE External News"}],"categories":[{"id":"145","name":"Engineering"},{"id":"135","name":"Research"}],"keywords":[],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cstrong\u003EBarbara Christopher\u003C\/strong\u003E\u003Cbr \/\u003EIndustrial and Systems Engineering\u003Cbr \/\u003E\u003Ca href=\u0022http:\/\/www.gatech.edu\/contact\/index.html?id=bt3\u0022\u003EContact Barbara Christopher\u003C\/a\u003E\u003Cbr \/\u003E\u003Cstrong\u003E404.385.3102\u003C\/strong\u003E","format":"limited_html"}],"email":["bchristopher@isye.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}