Monitoring is supervising activities in progress to ensure they are on-course and on-schedule in meeting the objectives and performance targets.
Recent advances in information technology have focused attention on the importance of good information systems to support logistics and distribution activities. This requirement for information has always existed, but the computer has enabled the development of more sophisticated means of data storage, processing and presentation.
Monitoring aims for
- To enable the achievement of current and future business objectives – where these are directly linked to associated logistics and distribution objectives.
- To facilitate the effective provision of logistics services, thus enabling checks to be made that the distribution operation is appropriate for the overall objectives.
- To enable the efficient operation of logistics resources, to ensure that the distribution operation is run as well as it can be
- To support the planning and control of an operation, so that any information can be fed back to the process of planning and management.
Business performance can mean many different things. Improving the business performance is accomplished by a comprehensive, systemic approach to managing accountability on an organizational as well as individual basis. Business performance measurement has a variety of uses and it is be measured to
- Monitor and control
- Drive improvement
- Maximize the effectiveness of the improvement effort
- Achieve alignment with organizational goals and objectives
- Reward and discipline
Different frameworks and reference models are used for measuring business performance, which usually includes the balanced scorecard and KPI.
A major feature is likely to be to measure actual progress against a plan. Typically this will be to monitor the budget in a way that identifies if some change from plan has taken place but also to provide a usable indication of why actual performance or achievement does not reflect what was originally planned. Another feature may well be to highlight specific aspects or components of the system that need particular attention.
Care needs to be taken in identifying these broader objectives. They need to be meaningful. Examples that fail the test include:
- The aim for distribution is to minimize costs. Is this to be at the expense of customer service? There needs to be a clearly identified relationship between cost and service requirements.
- The level of service is “as soon as possible”. What does this really mean? Are all orders treated as urgent?
- Everything is to be delivered on our own vehicles. Does this mean resourcing the fleet to cover peak demand all year round? This is almost certainly not a cost-effective approach for determining transport requirements.
The monitoring and control of logistics and distribution operations are oft en approached in a relatively unsophisticated and unplanned way. Control measures are adopted as problems arise, almost as a form of crisis management. It is important to adopt a more formal approach, although this should not necessitate a complicated format. There are several systematic approaches that have been developed and these have a varying degree of sophistication and detail.