Link operational tasks in logistics with strategic goals of the company
Evaluation of business performance is a must for any successful company. Recent crisis has shown that those companies without comprehensive strategy are doomed to fail. 80% of most successful companies in the world are using different performance evaluation systems. But balanced scorecard is known as one of the best management systems that makes it possible to link operational management and strategic goals. In fact, it is useless to use balanced scorecard without a comprehensive strategy. At the same time, balanced scorecard helps set strategic goals. Many people are making mistake and often substituted strategy with the balance scorecard. Well, this is the most typical and deadliest mistake. A comprehensive strategy is the company vision, mission, set of values, correct positioning and strategic goals. Balanced Scorecard is a unique tool as it was the first to include nonfinancial indicators to the set of KPIs to be evaluated.
Effective logistics company
Most large companies have own logistics departments or use services of logistics companies. As business turned international the delivery and shipment issues have become very acute. Customers and customer companies want to timely receive their products and cargoes. Moreover, they do not want to overpay for such services. Thus, a logistic company or logistics department needs to make sure the product is delivered as soon as possible and the minimal amount of money is spent for shipment.
How can one say whether or not a logistic department is operating efficiently? Products and cargoes are delivered on time? Well, this is a good indicator but not the only one. The problem is, that the ship can cost may sometimes exceed the product value which makes it extremely expensive for a customer. A logistic company may possess a huge fleet of trucks and cooperate with airlines and railway companies but still lose money because of inefficient management.
Balanced scorecard will help set strategic goals and logistics and develop a set of key performance indicators that will represent most important aspects in the work of a logistic department. At the same time all those key performance indicators will be integrated into the system of strategic goal for the entire company.
Consequences of effective logistics
Balanced scorecard will offer to look at nonfinancial indicators such as customer satisfaction or employee satisfaction which sometimes have a very deep influence on performance of a logistic company.
Optimizing work of the logistic company is making it profitable and efficient. A satisfied customer who received his product on time is a loyal customer and thus he is a supreme value for the company since he is a regular source of income.
Tags: bsc implementation, delivery evaluation, delivery kpi system, logistics evaluation, measure logistics
