Development of Logistics Efficiency Metrics Project # CDP10-METR

1. Development of Logistics Efficiency Metrics Project # CDP10-METR Project Team Principal Investigators J. Rene Villalobos, Arnold Maltz, Phillip Carter Graduate Assistants Hector Flores, Alfonso Ibanez, LiangjieXue, Cesar Meneses Project Motivation • The costs associated with product logistics represent approximately 8% of a product´s final price • Warehousing, inventory and transportation costs • Important to assess and monitor the performance of individual components of the logistics system • Techniques for the continuous monitoring and control of logistics costs are not very common in industry Project Objectives • Development of tools to provide a continuous estimate of the availability and efficiency of transportation/logistics resources used for transporting goods. • We aim to develop a set of indices or metrics that reflect rates behavior of representative truck lanes Project Activities • Define target components of performance metrics • Evaluate existing logistics indices and metrics • Determine characteristics of transportation lanes • Design potential performance metric/index • Evaluate performance metric/index for conceptual and empirical validity • Continuously update the metric/index Research Methodology Logistic Analysis • Identify and analyze the most common traffic lanes • by frequency of use • by commodities transported • by mode of transportation • by performing Pareto classification • Acquisition of rate lane information for representative lanes • Seasonality analysis Reduction and Clustering • Formation of clusters by using correlation, seasonality and market efficiency of traffic lanes • Data reduction by using correlation and principal components analysis • Determination of partial indices Logistics Efficiency Monitoring • Decomposition of freight bill into FTL and LTL information • Development of individual comparison metrics • Gap determination through DEA