The Strategic Contribution of ERP Systems to the Formulation of Non-Financial Key Performance Measures (KPIs) in Logistics Activities: An Exploratory Study in Northern Greece

Introduction

This paper portrays the strategic significance of a metrics system formulated by appropriate data derived from an ERP system in order to measure and tackle performance in logistics’ associated activities. The specific issue, the issue of performance evaluation is of great importance since there are already positive correlations researched and found by rich streams of literature concerning performance evaluation and non-financial performance measures. Thus, the importance of this study lies in the fact that performance evaluation is explored through being narrowed down to logistics activities and defined through the implementation and use of ERPs (Enterprise Resource Planning Systems). Based on research conducted in a number of SME’s in Northern Greece, significant correlations have been found with respect to properly set non-financial performance measures (KPIs) and logistics activities such as procurement, purchasing, supplier evaluation, warehousing, order processing and customer satisfaction in order to determine factors that adversely affect the efficient flow of goods within the supply chains. With the evolution of technology and Information Systems (IS), customers at any level of the supply chain are able to have access to vital information concerning processes and outcomes of interest so that proper integration and visibility through the supply chain is attained.

Literature Review

In turbulent times, organizations are struggling to perform in a rather dynamic business environment which requires a flexible-although structured-strategic approach in order to be tackled. Among various activities such as manufacturing, purchasing, operations, procurement and marketing, logistics has grown to be a viable component of the supply chain within the last fifteen years since it acts as an enabler of supply chain management (Panayides, 2004; Bienstock et al., 1997; Mentzer et al., 1989). For the purpose of this paper there is a necessity to address the goal of supply chains in a global context given the interdependence and interrelation of business entities within any given industry.