Defining Service Levels to Evaluate European Logistics Configurations

The progress towards a common European market as well as the implementation of JIT, MRP and other systems may lead to the need to reevaluate and possibly centralise the distribution systems of firms operating in Europe. How four firms analysed and changed their European logistics structures of warehouses, transport and information systems is described. A five‐step evaluation and implementation process is presented. The basic premise of the process is the correct definition and management of service levels, after which alternative configurations are developed. The cost implications are then evaluated, and the optimum alternative is established. Techniques for service analysis such as the use of samples, iso‐day diagrams and distance‐time diagrams are also included.