Logistics performance measurement system for the automotive industry

Abstract

Logistics can be seen as a key competitive factor in the automotive industry due to the rising number of model variants and options. With the increasing importance of logistics (Gunasekaran et al. in Int J Prod Econ 87(3):333–347, 2004), the evaluation of logistics effectiveness and efficiency is gaining increased attention. Logistics performance management (PM) is the key to quantifying the current state and improvement potentials within logistics. To account for the increasing importance of a supply chain, logistics PM needs to start at the supplier and reach at least until the original equipment manufacturer’s (OEM) assembly line. Furthermore, logistics PM needs to be in line with the latest logistics concepts, mainly based on lean logistics. In contrast to the great importance of logistics PM, the literature analysis shows a limited availability of logistics performance measurement systems (PMS), which are actually applicable to industry within a lean logistics context. The systems in the literature are either too high level to be useful to practitioners (e.g. supply chain-orientated systems) or too narrow in focus, and therefore do not cover the supply chain and lean perspectives. In the following paper, a logistics PMS is developed which allows for assessing the effectiveness and efficiency of current logistics processes. The developed approach incorporates the latest logistics concepts in the automotive industry, integrates a process orientation with a supply chain perspective, and is defined with the specificity required to enable the implementation within a specific industry context and triggers continuous improvement. The suggested framework is evaluated in an automotive context, presenting a short case study on the implementation of the proposed framework at two sites of a German automotive OEM. Furthermore, future application potentials and development needs are summarised. The paper’s contribution to the literature is in the field of logistics PM, specifically in the automotive industry. It offers a new approach, applicable to automotive logistics, which follows lean principles. For industry, this paper provides specific suggestions for a PMS, as well as performance indicators to holistically monitor the logistics chain. While being generic in terms of its definition, it can be seen as specific enough to be applicable in industry with limited adjustments. It provides practitioners with answers to the question of which performance indicators to use in today’s automotive logistics chain and which indicators serve as a base for continuous improvement.