Sustainable Solutions for SCM

The survey of Keebler was conducted in 1999 and sponsored by the Council of Logistics Management. 355 US-companies participated. They could select from a list of 70 metrics, which metrics they used. It was found that there was a strong focus on external and internal metrics as well as on cost. On the other hand, it showed a low coverage of metrics to control operative logistics. A delimiting factor for low coverage was a missing IT support or missing information in IT systems [27]. The survey of Liebetruth was executed in 2004 on the basis of 19 expert interviews with responsible supply chain managers of selected companies in Germany. The aim was to find out which elements formed the information basis for performance measurement in supply chains. It was found that even though the focus was on supply chain performance measurement, “classical” logistics performance elements such as inventory, delivery reliability, actual vs. budgeted (logistics) cost and accuracy of planning systems were the most used performance elements in the surveyed companies [34]. The survey by Weber et al. was conducted in the period between July and September 2011 and sponsored by the German Logistics Association. 180 answers from logistics service providers and 251 answer from industrial and trading companies were recovered, representing a return rate of 37% and 44% respectively. It was found that progressive companies achieved better results in forming a consistent system of KPIs integrating the operative and strategic level as well relating its own performance to that of their most important external partners. Also successful companies focus on few important KPIs report them timely to the responsible managers and adapt the KPIs when new challenges in the companies’ context arise [56]. Some strengths add to the widespread use of KPIs: • The use of KPIs is easy to communicate. The famous saying “What gets measured gets done” is commonly associated with KPIs. • A system or a set of KPIs offers a multidimensional view on certain aspects. And it is possible to flexibly adapt the system by adding new KPIs or eliminating old ones. But some weaknesses can also be diagnosed when analysing the usage of KPI systems: • There is a great risk of creating a data graveyard because, when adapting a KPI system, often only new KPIs are added. An argument against eliminating is that there is no more possibility to compare new developments with the past. Also, the risk of inconsistencies increases. • Moreover, with an overflow of KPIs, the interpretation of every KPI not obvious throughout the whole company or supply chain. So it is questionable whether the KPIs will generate impact. • There are associated risks of particular KPIs that are not defined along the above stated guidelines. As there are examples within each guideline this is not discussed here. • As there is no standardised structure and often no explained connection between the KPIs, it is not possible to check whether important developments or explanations are missed because no KPI for this event was generated. Also due to a lack of standardisation, it is difficult to compare the KPIs of different companies.

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