THE CHALLENGES OF IMPLEMENTING THE PERFECT ORDER CONCEPT

This paper examines how to implement a "perfect order" concept of measuring logistics system performance on the theory that perfect orders, orders where customer expectations are met with great precision, are a useful way to measure outcomes that may rely on a series of different elements for execution and are not distorted by variations in different steps along the way toward order fulfillment. Perfect order measures are also useful because they rate the collective performance of various system inputs and outputs, helping firms achieve the goal of tying together various system components in a measurable way. Three questions are addressed here: how should a perfect order be defined?, what are the challenges in implementing perfect order measurements?, and how can they be used to change practices and improve service? The paper contains a literature review of logistics performance measures and attempts to classify logistics activities in terms of how best to measure them. One matrix consists of three criteria, importance to customers, firm performance and cost or time to improve it. Overall, firms have found perfect order measurements useful, even if they are challenging to implement and make effective use of the data gathered from perfect order surveys. Further research is needed into how conjoint analysis or other market research techniques could be used to better define perfect orders and how data can be better gathered and analyzed to arrive at more accurate measures of customer satisfaction.