Objective:
The objective of this lesson is to equip learners with the skills to quantitatively measure and analyze the effectiveness of logistical skills. By the end of this lesson, participants will be able to apply various techniques to assess the impact of logistics on an organization’s performance and make data-driven decisions to improve logistical processes.
Comprehensive Content Overview:
Logistical skills encompass the efficient planning, execution, and control of the movement and storage of goods, services, and information within an organization and throughout the supply chain. To evaluate the effectiveness of these skills, one must understand the various components of logistics, including:
- Inventory Management.
- Transportation.
- Warehousing.
- Material Handling.
- Order Fulfillment.
- Supply Chain Coordination.
- Demand Planning.
Each of these areas can be measured using specific key performance indicators (KPIs) and metrics.
In-depth Explanations with Actionable Insights:
Inventory Management: To measure the effectiveness of inventory management, one can analyze the inventory turnover ratio and days of inventory on hand. These metrics indicate how efficiently inventory is being managed and can be calculated as follows:
Metric Formula Inventory Turnover Ratio Cost of Goods Sold / Average Inventory Days of Inventory on Hand (Average Inventory / Cost of Goods Sold) * 365
For example, if a company has an average inventory of $100,000 and the cost of goods sold is $600,000, the inventory turnover ratio would be 6 (indicating inventory is turned over six times ...
