Logistics performance measurement — an application to pulp and paper industry

Abstract

At present, the most common company level inventory performance yardstick is inventory costs in relationship to revenue. This yardstick does not adequately reflect differences in the scope of vertical integration between different companies. The first objective is to develop a suitable yardstick for inventory performance that could enable strategic or company level screening for the need for improvement. This new yardstick is then tested with pulp and paper industry statistics and annual report data. The second objective is to develop a framework for logistical performance measurement at the operations level. An application of the measurement framework in the distribution logistics of one mill of a large Finnish pulp and paper company is described.