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2.4 Measurement and evaluation

Like all other processes, materials management must have proper systems of control and measurement. To be able to control the process, it must be properly measured. The firm must be able to collect data, identify each stage of the process and make improvements. Typically, the stages to identify and measure include:

In the process of measurement, three critical variables exist. These are:

The source and reliability of data is an important issue. Broadly, data can be divided into two kinds - soft (personal service and customer satisfaction ratings, for example) or hard (for example, product availability). Firms can develop links and control variables that can impact on performance. These can include differentiating between customer types, products, markets and so forth.

The measurement can also be used to compare activities against targets or against different activities. Firms use measurement information to compare their activities with other companies.

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