What are logistics and supply chain management costs and agility?
Measurement of logistics and supply chain management (SCM) key performance indicators (KPI) is an essential part of the agile supply chain concept. Supply chain agility is defined as a measure of how flexible a firm is in response to customer demand. While inventory turns is the main KPI for evaluating supply chain agility, logistics and SCM cost KPI allow firms to evaluate the efficiency of their logistics and SCM operations. The combination of supply chain agility and efficient SCM practices is key to the long term competitiveness and prosperity of Canadian firms in the emerging global supply chain context. Logistics and SCM costs occur internally within firms, are outsourced to logistics service providers and occur via inventory carrying cost. The sum of these three components will enable firms to evaluate their total logistics and SCM costs and benchmark themselves against their own industry, their U.S. counterparts and other key sectors that share similar logistics and SCM process
