LAUSR

Logistics systems are complex networks of facilities that are designed to deliver products/services to customers with the objective of providing superior customer service in a most efficient manner. Measuring the performance of these systems is challenging owing to their structural complexity. Logistics facilities in the system are nonlinearly interconnected with material, information and money flows causing response delays in the system. Measuring the performance of logistics systems therefore, requires a comprehensive understanding of the structure and behaviour of these systems. This paper proposes a systems approach to understand the structure of logistics system of small and medium manufacturing firms. A causal loop (influence) diagram is proposed for mapping the system that identifies various key components of a logistics system - resources, performance drivers and outcomes and explains their interrelationships using feedback loops. The diagram explains the structure of the system that causes the observed system behaviour by describing how the deployment of logistics resources influences the outcomes through performance drivers.