Defining and calibrating performance indicators of a 4PL in the chemical industry in Brazil

Recent developments in logistics have led to the use of third-party-logistics firms in different industries. However, outsourcing the logistics operation to a 3PL requires close monitoring of the logistic system performance, and also of the service level effectively delivered to customers. Issues related to the concept, definition and design of a quantitative system to measure such performance are discussed in this paper, and the experience of building a performance evaluation system is also described. The system was designed from the point of view of a 4PL firm contracted by a chemical company in Brazil to contract and monitor the work of a 3PL. The authors have developed a method to calibrate an S-curve used to evaluate the performance indicators. In the application case, the design of a set of indicators to evaluate the services of this 4PL firm in the Chemical industry in Brazil is described. The calibration method was applied to help the evaluation process by the 4PL firm in practice, and showed a great potential for application in the whole segment of logistics operators and companies. (c) 2008 Elsevier B.V. All rights reserved.