The importance of the performance evaluation in logistics is what will allow us to know the good work or not of the logistics processes (and each of its phases) that we are carrying out. In other words, it is an objective and quantifiable way of knowing if the logistics processes that are being carried out are as good as they could be or if, on the contrary, there are errors that must be corrected.
What is Performance Evaluation in Logistics
Performance evaluation in the logistics sector consists of measuring the performance of processes throughout the supply chain . This measurement can be done as a whole or by specific parts of each of the phases. For this, it is necessary to establish specific KPIs . That is, key performance indicators that allow us to obtain concrete, objective and quantifiable data that, when compared with other metrics, allow us to know the degree of performance of the element that we have evaluated.
The importance of performance evaluation in the logistics sector
The importance of performance evaluation is that it will allow us to know the degree of performance of the evaluated process . In other words, it will allow us to know if the process is running optimally (with the maximum possible efficiency), or if, on the contrary, the development of the process is still susceptible to being modified or redesigned to be even more efficient. than it already is.
In addition, other benefits that the application of performance evaluation methods provides us are that it allows us to know the degree of competitive advantage compared to the competition, as well as to save available resources without affecting the quality of the service provided, thus guaranteeing the satisfaction of the customer .
How to perform performance evaluation in the logistics sector
Once we have seen the importance of performance evaluation, it is worth wondering how to carry it out. Broadly speaking, this is executed in several phases that, as they progress, allow us to improve the degree of knowledge and information that we have about the item evaluated in particular.
- Correctly identify the process : The first step should be to correctly define and identify the process or part of it to be evaluated. In this way, there will be no cross-information problems or external elements that can influence the process and that are not evaluated.
- Define the KPIs to be used : Next, the KPIs to be used in the performance evaluation must be chosen. These KPIs must be maintained throughout the process, since they are the ones that will give us the concrete data that will allow the
objective evaluation of performance. KPIs must be adapted to each type of process is evaluated: transport process , process shipments , satisfaction of the customer , etc.
- Data collection : Once both the assessment object and the KPIs to be used are defined, it is time to put it into practice and collect the data. The more data that can be collected, the better, since it can be screened later if some of it does not meet the objectives of the evaluation.
- Selection of data obtained : Next, we proceed to select those data that are relevant for the evaluation. That is, those that will add value to the analysis, and the rest are discarded.
- Analyze the data and compare it with other metrics : In this phase, the data obtained is carefully analyzed and compared with the other metrics and data available. In this way, the results of the performance evaluation are obtained.
- Decision-making : In light of the results obtained, it is evaluated whether a change is necessary in the development of the evaluated process or whether, on the contrary, it remains in the same conditions in which it has been developing up to now.
This decision making will depend, to put it simply, on whether the results are good or not. That is, if they are efficient enough or if they need substantial changes to be improved.
In conclusion, the importance of performance evaluation lies in the information it offers us when it comes to knowing whether a logistics process is carried out efficiently or not. Thanks to this information, concrete decisions can be made to help us improve it and, in this way, always aspire to a full optimization of the entire set.