Living in Peru : your everyday companion

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As a consequence, we have witnessed a variety of global benchmarking initiatives and efforts during the last few years that concern the logistic performance of organizations. They highlight the benefits of participating in exercises of comparison or of creating reference points as a method of seeking opportunities for improvement, justifying investment projects and identifying good logistics practices that generate quantitatively superior results within a Latin American and worldwide context.

In spite of having attempted similar exercises on previous occasions, to date there does not exist any information in Peru that allows for such conclusions or comparisons to be made. For that reason, it is essential to develop a system of indicators that will allow businesses from different industrial sectors and from logistics services to gain initial insight into the status of logistics in Peru, and from this point, to investigate better practices and opportunities for improvement and to identify specific projects to increase their efficiency. An important point to mention is that the FOMIN IDB has just approved a source of funding for GS1 Peru for the implementation of a project to expand good logistics practices in the agro industrial sector of Ica and Tacna. To begin with, it will carry out a benchmarking investigation in order to evaluate the current state of logistics of the businesses in this sector.

Within this context, the AmCham Peru Logistics Committee, in its effort to obtain relevant logistics information from businesses and representative sectors of the country, proposed the formation of a work team in order to define a minimum set of indicators for the measurement of efficiency, beginning with existing and currently functioning regional and/or worldwide benchmarking initiatives.

Given that on a worldwide scale there exist certain projects that form part of global enterprises concerning logistics management indicators and benchmarking processes, it intends to use already existing documents and calculation principles, developed both by GS1 (Global Standards One) and by other institutions, such as the Latin America Logistics Center (LALC), in order to benefit from what has already been discovered and the path that has been taken.

In fact, the LALC has already defined 10 indicators, as well as its own method of calculating the efficiency of logistics procedures and the management of storage networks, which it has named, “Crucial Logistics Signs”. These could be used as a basis for a pre-selection of the set of indicators that are to be applied to the case of Peru:

• Perfect Orders (% of the total)
• Fill Rate per Production Line (% of the total)
• Prediction Errors (%)
• Total Cost of Logistics/ Sales (%)
• The complete customer order procedure
• The complete procedure of purchases from providers
• Use of the transport fleet
• Storage capacity
• Delivery lines per hour and personnel in distribution center
• Inventory rotation

Subsequently, once the base initiatives have been established, the work group will conclude with a set of indicators for the case of Peru and will produce a business plan and methodology for incorporating the businesses that are interested in the project and for carrying out the investigation.

Ultimately, it seems clear that the results of this initiative will benefit the participating businesses because they will allow them to identify what they are, and are not, doing well in order for them to instigate the necessary corrective measures. In addition, as an investigation into benchmarking, the analysis will allow for useful comparisons and for optimum practices to be identified, which, in its turn, will promote the logistic efficiency of the businesses and of their personnel.
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