Data Envelopment Analysis to measure relative performance based on key indicators from a supply network with Reverse Logistics

Abstract

Introduction: Data Envelopment Analysis (DEA) is used to measure the relative performance of a series of distribution centers (DCs), using key indicators based on reverse logistics for a company that produces electric and electronic supplies in Colombia. Objective: The aim is to measure the relative performance of distribution centers based on Key Performance Indicators (KPI) from a supply network with reverse logistics. Methodology: A DEA model is applied through 5 steps: KPIs selection; Data collection for all 18 DCs in the network; Build and run the DEA model; Identify the DCs that will be the focus of improvement; Analyze the DCs that restrict or diminish the total performance of the system. Results− KPIs are defined, data is collected and KPI’s for each DCs are presented. The DEA model is run and the relative efficiencies for each DCs are determined. A frontier analysis is made and DCs that limit or reduce the performance of the system were analyzed to find options for improving the system. Conclusions: Reverse logistics, brings numerous advantages for companies. The analysis of the indicators allows logistics managers involved to make relevant decisions for higher performance. The DEA model identifies which DCs have a relative superior and inferior performance, making it easier to make informed decisions to change, increase or decrease resources, and activities or apply best practices that optimize the performance of the network.