A performance analysis examines various service points in logistics for their contribution to value creation. This involves checking at what cost and in what quality the service points of logistics areas, such as procurement, production, distributionand branch logistics, meet the requirements.

In the performance analysis, the characteristics of service units are determined and the flow of orders, informationand materialsbetween the units are recorded. The level of costs and the use of different resources finally become apparent in the input-output analysis.

Aim of the performance analysis

The goalof the performance analysis is to identify potential for improvement in the operational and administrative service units. As a result, warehouse key figures are to be determined, bottlenecks identified and weak points explained. Performance analysis is aimed at planning measures to increase performance, minimize costs and optimize the use of resources.

There are some weak points in company logistics that counteract a smooth process flow and lead to an increase in costs. In the past, potential analyses have identified the following weaknesses:

1. Bottlenecks
There are often long waiting times before the bottlenecks. With high capacity utilization, this results in high throughput times.

2. wide pass points
These service centers are utilized to less than 70% of their capacity on an annual average. Wide passages are considered typical wastage points because their contribution to value creation is minimal or insufficient.

3. Points of failure
These service points have an availability of less than 90%. While preceding service points are blocked due to interruptions, subsequent service points are underutilized. This results in missed deadlines and delayed delivery times.

4. Redundancy points
Redundancy points serve to ensure the provision of services. This protection is provided in the form of parallel stations, which can be switched to as soon as a service station fails. However, instead of full redundancy, it is often sufficient to repeatedly secure only a part of the service center.

5. Delay points
Delay points are service points that often cannot meet given deadlines or even significantly overrun them. For example, a higher level of material buffer and more effective planning of service points can lead to the elimination of delay points.

6. Main cost centers
Main cost centers bear the largest share of logistics costs. Depending on the company, the main costs are proportionally represented in different areas. An improved organization and restructuring allow potentials for cost reduction.

You can find more information under Benchmarking.

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