Development of Corridor Performance Benchmarking Dashboards

Abstract

Chapter Overview: Trade corridors can be defined as a culture of trade agreements and treaties, statutes, delegated legislation and customs that govern and guide trading relationships [1]. Trade corridors are in essence a large group of entities that work together to transport and deliver goods across a large geographical area which can involve multiple countries and companies in the process. Small logistics operations are mostly understood well and can be managed efficiently. As operations grow to the size of trade corridors, understanding and management of the entire corridor can become daunting very quickly. In this chapter, the goal is to define the motivations behind the development of corridor performance benchmarking dashboards. Background: To create a system that can effectively aid people in managing a logistics operation the fundamental components of logistics needs to be understood. Logistics deals with the management of the flow of goods or materials from the point of production to the point of consumption and in some cases even to the point of disposal. Logistics is, in itself, a system. It is a network of related activities with the goal of managing the orderly flow of material and personnel within logistics channels [2]. Key Fundamentals: The two factors that determine if a company prospers are customer satisfaction and growth [3]. Essentially this means that companies should keep their customers satisfied and aim to grow at a reasonable pace. In this research, the focus is primarily on customer satisfaction and eliminating overhead costs since these aspects are heavily influenced by the logistics operations of a company. By improving each of the components of customer satisfaction, the cost of logistics operations can be reduced. The concept of customer satisfaction can be summarised in 8 components: Product: The majority of products need to be packaged properly for efficient transportation as well as inventory and warehousing. Ensuring that products are delivered in a way that facilitates customers to use it easily is a key factor in customer satisfaction. • Logistics: Choosing the correct transportation channels and diminishing distances between production and consumption in one of the largest factors to consider and can result in significant cost-savings regarding local and global transportation. • Quantity: The right quantity involves balancing the amount of inventory held with the cost of holding that inventory including capital tied up in inventory, variable storage costs and obsolescence. A lack of inventory would lead to lower customer satisfaction, whereas too much inventory could lead to unnecessary storage expenses. • Quality: Product quality is one of the largest factors when it comes to customer satisfaction since it is often used to compare similar products. Despite the importance of quality, it is frequently sacrificed to compensate for problems that can occur such as delays, defects, degeneration or downfalls. • Location: Customers are willing to pay more for a product that is located close to them than travelling to pay less. This behaviour especially takes place when customers want to save time and transportation cost. Configuring an optimal distribution network to position products as close to as possible to customers is a key component of customer satisfaction. • Time: Ensuring a product is available on the market at the right time is important to increase sales. If a product is sold when there is no need for it, there is no spending power or the product cannot be used due to seasonal reasons the attempt to generate sales will fail. Customer: Customer desires and behaviours are dynamic and product sales need to be able to adapt. Instantaneous data analysis is important to understanding and forecasting demand-oscillations and intensive collaboration with suppliers can aid their preparations to alleviate potential shortages or overproduction. Cost: It has never been easier to acquire high-quality products inexpensively than now since products are offered globally. If products are equal or identical, the deciding factor is typically cost. Lowering cost has a direct impact on the profit from every product sold since it is related to all business activities. All of these components within customer satisfaction are dynamic. The rate at which components change varies greatly, but they do change over time. The goal is to try and optimise these components and maximise customer satisfaction as a result. This research is focused on logistics and cost since those aspects are relevant to the transportation and distribution of most physical goods. Improvements in those aspects of customer satisfaction would be a benefit to most companies and consumers.