This message is available on the new blog from this link
It is sometimes good to revisit the state of the art of some of our indicators to see what is being discussed and further reflection ...
Here is a brief overview of the history of the service rate, one of the Indicators most used in the Supply Chain:
Helmut Schneider (1981) is one of the first authors to have made a review of systems for measuring the level of service and putting into perspective the costs attributable to stock-outs.
Lagodimos In 1992 further defined the concept of service rate by introducing three new measures are:
- The likelihood of seeing a break on a product on a period.
- The "fill rate" which represents the portion of the command that is delivered to the customer with the available stock.
- The "modified fill rate" of the formula 1 - ("The average supply disruptions before" / "The average demand over a given period")
In 1998 the work of Silver define the concept of "fill spleen. Even if the flag is commonly called "fill rate" of new measurement systems appear as the "volume fill rate (VFR), the" order fill rate (OFR) and the "line fill rate (LFR) that correspond to the fraction what is delivered compared to what has been ordered by the customer. The three indicators are based respectively on the volume (quantity or amount), the complete commands or command lines complete.
Subsequently these indicators have become more complex by integrating the concept of time. Thus appeared the indicator On-Time Delivery (OTD) which allows to obtain the fraction of the command that is delivered to the customer on time. That indicator is also interesting in the sense that it is representative of the client's vision and can reveal problems other than the availability of stock.
This story inspires service rate 3 reflections:
1 - A dominant design that hides some complexity of calculating the indicator:
Indeed, we all speak the same thing when we talk about the indicator service rate. But in fact, behind the amazingly simple definition of the indicator (percentage of the command that is delivered) lies a vast complexity. Here are some questions we may need to ask ourselves:
- What is the perimeter controls observed over the period? Orders to be delivered in the period? Orders placed in the period? Commands whose first delivery was made on the period? Orders for delivery is fully realized?
- What is the denominator (which is ordered)? The lines starting from the customer ordered? The lines came from the Purchaser (Lines commissioned for the extraction lines rejected by the computer system)? Lines recorded by the data entry operator (which can spread by itself some lines that cause problems)?
- What is the numerator (which is included)? This is partly delivered? What is completely left?
- What date is reflected in the indicator OTD? ship date? the theoretical delivery date? the date of actual delivery?
2 - The service level is an internal indicator of performance before being a quality indicator.
Indeed the rate of service provided before any information from a shortfall suffered directly by the company but has little interest felt by the customer. For example if the client does not update its file section, it will pass orders on items closed. These command lines will be "rejected" in the information system so that the line is not delivered will not appear in the service rate. On this type of problem: on the side of the business we lose a sale on the new product (it should be noted that some companies are introducing automatic substitution but this can cause problems at the customer upon receipt of the unknown product ) and the client side we suffer a shortage of stock.
Moreover, if the indicator OTD has a good alternative as monitoring the quality of customer service, it is little used because logisticians focus on what is delivered that is delivered on time.
3 - Performance indicators of the supply chain should not stop at the borders of the enterprise:
Too often (apart from some giants of the GSA, on certain families of products with high turnover) players mass distribution is confined to measure their own service rate. But the supply chain is a process that does not stop cross-border business. It is therefore essential that all stakeholders (manufacturers and distributors) are finally becoming aware of the need to work together on a common service level and unique than the linear store. This is called CPFR (Collaborative Planning, Forecasting and Replenishment), is widespread in the USA. Arrived in France in the 2000s ... It will, in my opinion, even long before this process is widespread in Europe ...
So finally, I will address two boards to my friends Logistics:
- If you want to start LSS project on service levels: consider the vision of your customer (see one of your client's customer) rather than recovering as is the service rate used in your business.
- and phase improvement: you lean on the CPFR process, you certainly inspired solutions which you never thought.
PS: Sorry for the lack of illustrations of this post! ;-)
0 comments:
Post a Comment