The Logistics Performance Indicators And Importance Commerce Essay

The Logistics Performance Indicators And Importance Commerce Essay Logistics encompasses a complex set of activities which require a collection of metrics to adequately measure performance. Chow et al. (1994) were probably the first to attempt to define supply chain (logistics) performance and they presented some measures for measuring logistics performance. Since then, most of the literature on logistics performance appears to focus on models and frameworks (Clarke and Gourdin, 1991; Mentzer and Konrad, 1991; Rao and Grenoble, 1991; Hubbard, 1992) and on managing different aspects of logistics (Larson, 1994). Sink and his colleagues have defined seven dimensions in order to capture their conception of what performance means: they are effectiveness, efficiency, quality, productivity, quality of work life, innovation and profitability/budgetability [International Journal of Logistics Management]. Given the lack of any universally definition for performance in the organizational literature, it should not be surprising that extant literature offers many ideas about the dimension that ought to be incorporated into a conceptualization of logistics performance. One of the best examples is the framework presented by Rhea and Shrock, where physical distribution effectiveness is defined as the extent to which distribution programmes satisfy customers [International Journal of Logistics Management, 5, p. 3] While measuring logistics performance, a comprehensive strategy of measurement is necessary for the successful planning, realization and control of the different activities which comprise the business logistics function ( Andersson et al. (1989). As Thor (1994, pp. 13-28) correctly advocates, there should be a whole family of measures. This is a balanced collection of four to six performance measures, usually including productivity, quality and customer satisfaction, which together furnish an all-inclusive view of results but, individually, also provide a diagnostic value. Developing such an approach, Mentzer and Firman (1994) claim that the management and control of logistics performance entails four broad aspects: Information systems to collect and report performance measures Efficient performance measures Variance analysis Corrective action Productivity within the performance scenario can be seen as a measurement of resource utilization, including the time element. The productivity philosophy and its improvement has been a high priority, in the first instance, in manufacturing, then in marketing, and later in physical distribution and materials management. Thus, the time is now ripe to focus on the whole logistics process. It is the shape of the organizations physical manifestations which is largely influenced by the nature of the values, beliefs and underlying assumptions of logistics management (Ericsson (1990, pp. 42-49). Quantitative metrics of supply chain performance can be classified into two broad categories: Non-financial and financial. In fact, in the late 1880s financial measures were mainly focused such as return on investment (Christopher, 1992; Schermerhorn et al.,, 2000). However as the second progressed during 1980s, the world market changed and companies began to lose market share to overseas competitors who were able to provide higher-quality products with lower costs and more diversity. To re- capture the competitive edge, companies not only directed their strategic focus from low-cost production to quality, flexibility and short lead time, as non-financial measures. (Bower Hout, 1988; Rushton Oxley, 1989; Stewart, 1995) Logistics performance measures can be categorized into two categories such as qualitative and quantitative measures. Qualitative measures include such as customer satisfaction and product quality etc., and quantitative measures include such as order-to-delivery lead time, supply chain response time, flexibility, resource utilization, delivery performance, etc. It has been suggested that the critical elements that form the basis of logistics management are time, distance and money. Some utilization, productivity and effectiveness metrics used in the logistics management are: Dimension Metric Example Utilization Actual input/norm input Area of warehouse occupied/ total area Productivity Actual output/actual input Ton-miles delivered/cost incurred No of orders processed/ no of hours of labor Effectiveness Actual output/norm output No of shipment on-time/no of shipment sent Utilization measures: They are used to track the use of input resources in process. In logistics, input could be characterized as financial, physical assets or inventory. Utilization metrics include the following: Spending measures Purchase price variance Distribution cost as percentage of sales Variance of transportation cost from budget Non financial resources measures Usage ratios Amortized costs Inventory measures Static metrics (capture level of inventory expressed in physical, financial or other terms) Flow metrics (capture speed of inventory as it flows through the system over a period of time) productivity measures Partial productivity measures (SFP-single factor productivity ratios ) Total factor productivity measurement Financial productivity measurement (ROI-return on investment )( (Frameworx, 2005) Effectiveness metrics Order fill rates( order filled /orders requested Line item fill rates( total line items not filled / shipped in time per period Damage rates (line items damaged per order) Order cycle time (elapsed time between receiving request and delivering order) Delivery or transit time (elapsed time between readying order for shipment and delivery order)( DfT, 2004) On-time ( orders shipped on time or orders received by customer on time ) Perfect deliveries (orders received by customers with no logistics service fullness) Importance of performance metrics: Implementing performance measures is a key to optimizing the supply chain. That reflects the entire process, rather than the individual components that make up the process. Managers can obtain a better picture of the process by focusing on the entire supply chain, rather than its individual parts. This is vital to emphasize the vital importance of the logistics process to the rest of the company and how logistics can affect the financial stability of the organization as a whole. (Rick J Blasgen, 2007) The effectiveness of supply chain of a company heavily affects its profitability and survival. Surprisingly few companies appear to have effective measures of each business process within the supply chain or information systems which readily produce the data necessary to drive improvement forward. Within the supply chain, logistics are considered to be the link between production/purchasing and marketing. Controlling logistics performance is a major concern for management. This is mainly because of the constantly changing environment and unforeseen events which may affect forecast performance levels. (Anonymous 1997) Three major reasons for measuring logistics performance: Reduce their operating costs Drive their revenue growth Enhance their shareholder value Example: By using the latest logistics performance indicators Dell has successfully become the dominant market player in the personal computer industry. It derives its growth because of mass customization, efficient supply chain management and reduced delivery time. In the era of global supply chains and mass customization, Dell has maintained close linkage of logistics. Dells performance measurement, manufacturing, logistics and shipping and strategies make it possible to customize computers for individual consumers at a low cost. It has successfully implemented low cost strategy through its efficient manufacturing operations, better supply chain management, reduced cycle time and direct sales model. orders are directly taken from its customers; either on phone or online. Thus, this reduces the cost of intermediaries that would otherwise add up to the total cost of PC for the customer. Dell also saves time on processing orders that other companies normally incur in their sales and distribution system by having latest performance measurement tools. Moreover, dell is able to get a clearer indication of market trends by directly dealing with customers. A two-to-three point cost advantage is also obtained by delaying assembly until a customers order is received (King, 2005). Three or four days finished inventory is kept on hand versus 30 to 45 days worth at some competitors. Parts inventory is replenished as often as every 90 minutes. an additional four or five points cost edge is brought by supply chain efficiencies derived from lean inventory management.(William Hoffman, 2005) Conclusion In todays severe competitive market place, product or service differentiation separates the winners from the losers. Mostly, the service differentiation is achieved by managing the logistics process efficiently and effectively. To achieve excellence in logistics, successful firms have to ensure that the firms business strategy is aligned with the key logistics processes and they are measured against predetermined performance objective The approach that a firm takes in establishing logistics measurements system does not matters a lot as the real value come when the information is acted upon to align the effectiveness and efficiency of the logistics process performance to value the customers. The role 3PL can have in your success is dependent on when you start measuring your logistics performance (james S. Keebler and David A. Durtsche 2007).

Christian Dior and the House of Dior: Luxury and Brilliant Style Combin

â€Å"When I opened my couture house I decided to dress only the most fashionable women from the first ranks of society.† –Christian Dior Christian Dior impacted fashion by establishing the house of Dior, and creating the New Look in 1947. When Dior created his designs, he looked back on his French country heritage and childhood for inspiration. The House of Dior still incorporates Christian Dior’s past into modern day designs and honors his traditions. (De Racogne) The New Look shocked people out of World War II and austerity and into a new era of elegant fashion. Dior’s New Look made him, the House of Dior, and Paris, the recognized fashion icons, which have also been influential in modern times. The House of Dior is one of the most recognized luxury brands in fashion. Christian Dior, the original genius behind the brand, massively changed the fashion world by introducing his New Look in 1947. His design changed a world of dreariness and sacrifice of World War II into one with a bright future, especially in fashion. Many people loved the gentle curves of the silhouette, emphasizing the women’s hi ps and small waist. The New Look trickled down to the mass markets at a lower cost. Everyone had access to the basic design of the New Look. Even in today’s House of Dior, luxury and heritage is a priority. Monsieur Dior always tied his designs back to his childhood, which designers still do today. Every piece of an outfit has a meaning to it from Christian Dior’s life. Luxury is also supremacy in the House of Dior, much like it was for Mr. Dior. Overall, without Christian Dior, the world may still be in an unfashionable rut. His New Look shocked everyone out of the war and into a prosperous future. His house carries his legacy today. Chr... ...ten work in the garden. Also, when he was older, and needed inspiration, he would visit his summer home to â€Å"be one with nature†. â€Å"Happiness pink† is a term Dior created to describe a light, soft pink. In stands for the color of his childhood home in Granville, which is now a museum. Black, red, and gray are also very common colors, which Dior thinks flatter almost everyone. â€Å"Red is the magical color that has created the strongest link between Dior and Galliano.† Finally, three other common fabrics are houndstooth, Prince of Wales plaid, and lace. (Offices of the House of Dior) Designers must study these stories, in order to create a true Dior-esque collection. Famous lines from the house of Dior are the Zig-zag, in 1948, the Vertical, in 1950, the Tulip, in 1953, the H-line, in 1954, the A-line, in 1955, the Y-line, in 1955, and the Spindle line in 1957. (Krebs)

Life Cycle Costing Finding

In management accounting, there are various costing methods applicable to use in practice. Some of practitioners are familiar with Job order costing, process costing and activity based costing. The key idea is to apply the right costing method in the right situation. Life cycle costing (LCC) offers another choice to the user. It is usually found in manufacturing, construction, software companies and product development. As we know, consumer and manager need to make decision on the cost of acquisition and cost of ongoing use of many different assets like equipment, motor vehicle, plant and other.As it seems, the key factor to influence the decision of acquisition on assets is the initial capital cost. In addition, the unrealized cost such as ongoing operation and maintenance cost should be considered before the decision making is made. Life cycle Costing is a process to determine the sum of all the costs related with an asset throughout its life which include acquisition, installation , operations, maintenance, renovation and disposal costs.For example, if the managers want to buy the motor vehicle for the purpose of company. They are needed to consider the whole life cycle costing such as their maintenance, their peration, their initial acquisition, and other factor which can give more information to decision maker to make the better decision. This report sets out to address what LCC, why LCC, when LCC, how LCC use on the manufacturing industry. The aim is to provide a clear understanding toward life cycle costing in theory and practise.FINDINGS 1 Life Cycle Costing Life cycle costing is estimates and accumulated costs over a product's entire life cycle in order to determine whether the profits earned during the manufacturing phase will cover the cost incurred during during the pre- (upstream) and post- (downstream) stage. By understand on how to identifying the cost incurred during the different stage of product life cycle, it might help the manager to manage t he total costs incurred throughout its life cycle.In addition, life cycle costing is also helps managements deeply understanding the cost consequences of developing and making a product and to identify area in which may cost reduction effective. The process of Live Cycle Costing involves: l. Assessing costs arising from an asset over its life cycle. Asset life cycle consist of various phase which are planning, acquisition, managing, distribution, and disposition. Though the asset life cycle, all the cost arising from each phase must be estimated at the earlier stage to facilitate in the cost reduction.The acquirer should consider all relevant cost because it is not only about the initial investment and acquisition cost, but all cost occurred over the anticipated life cycle of the assets. II. Evaluating alternative that have an effect on the cost of ownership. The comparisons of asset alternative whether it is at the concept or detailed design level should be evaluate in order to ach ieve better outcomes from the assets. Each alternative may have different pros and cons. Selecting unfriendly alternative may affect all the cost incurred during the period of ownership.Therefore, a thorough evaluation shall be made to avoid unwanted circumstances. For example, the mobile phone industry such as Nokia, Samsung, HTC and other is a fast moving product. Life cycles are short, mobile phone manufacturers spent lots of money on R;D and they have to recover these costs in a short period of time. This explains why newly released mobile phones are sold at such high prices. 1. 2) Reason for use Life Cycle Costing l. Comparison of asset alternatives to achieve better outcome from asset. Each asset lternatives should be evaluated so that it will assess the risk and benefit on every alternatives.A strategize development and implementation of plans and programs for the assets should be done to ensure that the assets operational objectives are achieved at optimum cost. II. Essentia l in determination of cost in the asset management process. It is important to identifying the cost in the asset management process whether the asset should be acquired, upgraded, maintained, or disposed of. It will serve a framework on how the asset will be acquired; planning for the upgrade and maintenance and disposal process will be managed. Ill. As managers' tools in asset.An effective asset manager' tools will help in delivering company objective effectively and efficiently. In addition, the manager's tools will be helps by systematic tools like economic appraisal, financial appraisal, value management, risk management and demand management in weighing up the costs and benefits, risks, objective, revenues and expenditures. ‘V. Enables the decision maker to balance the performance, reliability, maintain abilities and other goals against life cycle costs. In order to achieve the outcomes that reflect performance, reliability and ability, the proper planning, allocation of ogether. . 3) It can be used in three stages Life cycle costing should be applied when there are three stages: l. The conceptual stage: This is the stage when the initial proposal for investments is being considered. It is to estimate the future cost and provision to be made over the life of the assets. For example, the different type and designs of machine to increase the sales production for the manufacturing industry. II. The acquisition stage. This is the stage where the supplier for the assets is being assessed. It is to assist in the selection of the most cost-effective option. Ill. The service stage.The stage of decision making on whether to maintain, improve or dispose of the assets. It is to improve the cost effectiveness of the production as well as to improve the specification of future assets. For example, when automotive manufacturing products their car product, they are improving their quality of car. So that to ensure the customer still keeps loyalty to buy their car for future. 1. 4) Estimate Life Cycle Costing The formula to calculate the life cycle costing: Life Cycle Costing = Capital Cost + Life Time Operating Cost + Life Time Maintenance Costs + Disposal Cost – Residual Value Product Life Cycle PhasesFigure 1 illustrates the relationship between costs committed and costs incurred in the life cycle costing. It involves three stages of a product's life cycle, the planning and design stage, the manufacturing stage and the service and distribution stage. Committed or locked-in costs are costs have not been incurred currently but that will be incurred in the future after the decision basis has been made. Costs are incurred when a resource is sacrificed or used. A system of costing is the record cost only had been done when they have been incurred.Furthermore, the costs that have been committed are difficult to be alter. The pattern of cost commitment and incurrence will vary based on the industry and specific product introduced. During t he planning and design stage, the cost management can be most effectively exercised compared to the manufacturing stage when the product design and processes have already identified and costs have been committed. At the post sales service and distribution phase, its focus more on cost containment than cost management. 1. 4. 2) Life Cycle Costing Model The information should be obtained before selecting a model.This is to ensure that the analysis can be made. Evaluation should be made in considering the applicability f all cost factors, empirical relationship, constants, elements and variables. Life cycle costing model should: l. Represent the characteristic of the asset being analyzed. It includes the intended use environment, maintenance concept, operating and maintenance support scenarios and any constraints and limitations. II. Comprehensive to include and highlight the relevant factors to the Life Cycle Costing asset. Ill.Easy to understand in order to permit timely decision mak ing, future updates and ‘V. Evaluate the specific Life Cycle Costing elements independently of other costing elements. 1. 4. ) Life Cycle Costing Breakdown into Asset Cost Some element need to be identified in Life Cycle Costing. This is because it requires the breakdown of the asset into its part of cost elements over time. The elements that should be considered are: l. Significant amount of cost that generate components of activity. II. Time in the life cycle when conducting the activity. Ill.Resources cost categories that relevant such as material, labor, overhead, transportation and others. 1. 4. 4) Benefits of Life Cycle Costing The benefits the manager can gain from Life cycle costing are: I. Planning and analysis of alternative solutions. It is to serve a framework to document and compare the alternatives to achieve significant cost benefits. Life cycle costing concept will give earlier actions to produce revenue or to lower costs. II. Selection of preferred alternative s. The decision maker can use the information for the selection process with the life cycle costing analysis.Better decision should follow from more realistic and accurate assessment of cost and revenue. Ill. Securing funding. The comparison between the alternatives that have different cash flow patterns over time is important. This is because there are corporate cash lows issues that need to be considered. Life cycle costing analyses provide a basis for projecting cash requirements. ‘V. Review. The life cycle costing can serve confirmation of the reliability of the life cycle costing model. Besides, the credibility of future life cycle costing plans can be achieved. . 4. 5) Life Cycle Costing Process Life cycle costing involves six stages which are: Stage 1: Plan Life Cycle Costing The documentation of the plan needs to be done at the beginning to serve a framework of life cycle costing. This plan must be review to ensure the plan has been interpret correctly and address clea rly. Stage 2: Select or Develop Life Cycle Costing Model All relevant categories of cost that will happen in phases of life cycle should be identified. Select a method for estimating the associated cost and develop the estimates.Stage 3: Apply Life Cycle Costing Model Life cycle costing model need to be validated and obtain the model results from each relevant combinations and support scenarios defined in the analysis plan. Stage 4 : Document and Review Life Cycle Costing Results The documentation of the results should be done to ensure the users understand clearly the results and affects of the analysis along with the constraints and Stage 5 : Prepare Life Cycle Costing Analysis Life cost analysis used to control and manage the ongoing costs of assets or part thereof.It involves review and development of the life cycle costing model asa cost control mechanism. Stage 6 : Implement and Monitor Life Cycle Costing Analysis Life cycle costing should have a continuous monitoring of the a ctual performance of an asset during its operations and maintenance and to provide feedback for future reference. 1. 4. 6) Application to industry For pharmaceutical products, the product life cycle is becoming shorter and shorter s new products keep being developed for the market demand purposes.It is not surprising that new drugs are being sold at very high prices. For example, drugs which are used to fght cancer in targeted therapy can cost a patient on average RM 20,000 to RM 200,000 per month. Again, the life cycle is short (or uncertain), and pharmaceutical companies need to pay back the initial costs in R&D in a short period making high prices necessary. You can imagine how much the companies need to pay for a team of top tier scientists who have been working in the laboratory day and night for many years while developing the drug.Finally, as a short revision on life cycle costing, suppose a new cancer curing drug XXX is expected to have sales of 100,000,000 units in the comi ng 10 years. The selling price is targeted at RM 1,000 per unit. R&D is RM 10,000,000,000, design cost is RM manufacturing cost RM marketing RM distribution costs another RM 100,000,000 and finally customer service RM 50,000,000. Find the life cycle profit for XXX as follow: RM Millions Sales Design Manufacturing Distribution Marketing Customer service Life cycle profit 1 oo,ooo (10,000) (500) (1000) (100) (50) 88,250 The life cycle profit is RM 88,250 million (or RM 88,250,000,000).It is for 10 years and thus on average every year the profit is RM 8,825 million which is quite normal for leading pharmaceutical companies. It can be seen that the total life cycle cost is RM 11,750 million and RM 10,000 million (or 85. 1%) spent on R&D. Life Cycle Costing can be conclude as key asset management tool which takes into account the whole of life implication on the asset starting from the cost planning, acquiring, operation maintaining and disposing. It assist in analyse not only the cost o f acquiring an asset but also the costs over an asset's life like long-term operational nd maintenance costs.In addition, it will be the guidance on how long term strategic planning process, analysis, evaluation and decision making process towards the asset managements. The best expected outcome can be managed if all the relevant cost and benefits over life span of an asset is taking into account. Lastly to overall cost involve in owning, operating and maintaining an asset from the initial planning up till disposal. Thus, selecting the best alternative in order to minimize the possible cost incurred and maximizes the potential savings that can be made.

A Incident That Changed My Life - 725 Words

Fiction Mckenna Crase A Incident That Changed My Life prologue On December 26th I was going on a road trip to Tennessee with my parents and my sister, Alison. We were in Ohio when it happened†¦. It was a windy, snowy winter when we were in Ohio. On December 26th there was black ice on the road. My dad was going a bit too fast. We slid on it and went off the road. I woke up three days later. When I woke up I found out the rest of my family was dead. The doctor in my hospital was named Zach. I just knew he was going to be my knight in shining armor. Oh yeah I forgot to tell you, my name is Alisa. It took me ages to pay off my hospital bill. After I got better that doctor and me started hanging out. We had one date and then another and then another. One day we went to this AMAZING restaurant. It was as good as hot chocolate on a cold day. Four years later we got married. I know right romantic. 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