When selecting a performance metric to use, a company should examine different. Supply chain measurements can cover many areas including procurement. What are supply chain metrics and how are they most useful. There are more than 1 million books that have been enjoyed by people from all over the world. The guide also includes functional level metrics that measure performance specific to the functions of inventory management and distribution management. Many people get confused about kpis or key performance indicators in logistics and supply chain operations. The diagnostic or level2 metrics are useful to diagnose performance issues. Supply chain business solutions apics for business. This paper distinguishes four simulation types for scm. A performance attribute is a grouping or categorization of metrics used to express a specific. Get ebooks supply chain management on pdf, epub, tuebl, mobi and audiobook for free.
From 2016 to 2017, labor costs as a percent of gross margin remained. This is the actual scorecard with supply chain measures and performance indicators. This will start to pinpoint the areas within your supply chain that could benefit from improvement. Every company knows customer service is important, but it is seldom welldefined, and even more rarely measured in logistics operations. Supply chain metrics that matter is a series of industryspecific reports published throughout the year by supply chain insights llc.
The top five supply chain metrics reported organizationally are the same as those reported departmentally, namely ppv, inventory turnover ratio, %total spend managed, total spend revenue, and dio. Lora cecere is the founder and ceo of the research firm supply chain insights. Drivers of supply chain performance to understand how a company can improve supply chain performance in terms of responsiveness and efficiency, we must examine the logistical and crossfunctional drivers of supply chain performance. Timewhen companies look at selecting supply chain performance metrics, they usually will examine those metrics that relate to time, as they are easily calculated, easily understood, and clearly show operational effectiveness. Supply chain management is full of metrics and acronyms that can be confusing to even the most seasoned professional.
The dod supply chain metrics guide is the result of collaboration with the military departments. Supply chain planning, at the tactical level, occurs regularly but is not a daily task. Supply chain management refers to what is at outside the firm to create high values for customers lalonde, 1996. The complete guide to supply chain metrics supply chain brain. Your supply chain team will work with your suppliers customer service teams, engineering teams, quality teams and even supply chain teams. Supply chain management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers. We recommend the definition of supply chain management developed and used by the global supply chain forum. By whatever name it is the sinuous, gritty, and cumbersome process by. Measuring supply chain performance usaid global health. To forecast how the values of these metrics will change once a supply chain is redesigned simulation may be used. Drivers of supply chain performance enhancing organizational. Pdf most discussions and articles about supply chain metrics are, in actuality, about internal logistics performance measures.
When your company implements a new supply chain execution system warehouse, labor, yard, or transportation, its an excellent time to evaluate your operations and metrics programs. All 17 key metrics for supply chain management that you ever. Fundamentally, the approach to measure and managing direct and indirect suppliers is the. Interview with lora cecere, founder and ceo of supply chain insights and author of supply chain metrics that matter published december 2014. In our plotting of industry results for the supply chain metrics that matter report s, we could see that certain. Track critical parts of supply chain with ready to use kpis.
Supplier performance metrics such as kpis derived from internal surveys or internal management systems. Editors pick kenco group logistics supply chain metrics. Global manufacturing sourcing contract manufacturing resource for castings, rubber molded parts, stampings, gears and tooling for the lighting, medical, automotive, agricultural and. In this report series we provide a deep focus on progress over the past. Inventory accountability and special management and handling. She is also the author of the enterprise software blog supply chain shaman. By all means monitor other metrics in addition to the top six indeed, most supply chain components will need their own kpis, like a metric for picking accuracy in the warehouse for example. Practitioners and educators need a common definition of supply chain management, and a shared understanding of the processes. Supplier assessment reporting, which can be qualitative and quantitative.
Performance measurement a report by the hospital supply chain metrics working group. Commonly used by supply chain management, metrics can help you to understand how your company is operating over a given period of time. Dec 12, 2017 theres a variety of metrics available when assessing supply chain performance metrics and each provide a different perspective of the piece of the supply chain it measures. Most organizations are short term in nature and plan along a timeline of one quarter to one year. Jan 03, 2020 supply chain kpis are essential the right ones. R ecently, institute for supply man age ment ism surveyed supply chain leaders about departmental performance metrics. Scor is the worlds leading supply chain framework, linking business processes, performance metrics, practices and people skills into a unified structure. By using a fictionalized case that aggregates the authors three years of intensive research, supply chain metrics that matter provides an engaging and useful way to. What are integrated performance measures for supply chains. In a competitive market, supply chain flexibility improvements are key and needed to support the innovation cycle of the business. Common metrics used to measure the supply chain filed under blog there are various metrics that can be used to measure the supply chain all of which can help to provide an overview of how the supply chain is performing, not just in terms of spend and cost, but also in terms of supplier information as well as operational aspects. Metrics, procurement and sourcing supply chain brief. Understand how your supply chain organization, distribution center or manufacturing site measure against competitors to close performance gaps.
The supply chain must then use the three logistical and three crossfunctional drivers to reach the performance level the supply chain strategy dictates and maximize the supply chain profits. Measuring supply chain performance through kpi identification and evaluation. Try to maintain extra metrics as secondary diagnostics though and keep your highlevel, crossfunctional kpis at. Just like your customers probably measure your performance, its important that you and your suppliers work together to determine the right metrics to measure their performance. The gartner hierarchy of supply chain metrics has long been regarded as the industry standard for endtoend supply chain performance measurement. This project offers a set of metrics that provide supply chain managers with a forwardlooking. The series starts in may when fullyear corporate reporting is complete for the prior year. Do you know how many fgs are leaving the ndc in ltl quantities. Dependability, responsiveness, cost, asset efficiency.
Logistics, metrics and software supply chain brief. Is your supply chainprocurement department tracking and reporting the correct measures. Supply chain measurements or metrics such as inventory turns, cycle time, dpmo and fill rate are used to track supply chain performance. When it comes to the deployment of blockchain in the supply chain, or anywhere else for that matter, these are still early days. This report proposed a series of metrics and standards that hospitals could use to evaluate their supply chain performance and target performance improvement. Fifty percent of acute and longterm care distributors, and 40% of physician office distributors report consolidation. Analytics represent the ability to make datadriven decisions, based on a summary of relevant, trusted data, often using visualization in the form of graphs, charts and other means. Further reproduction prohibited without permission. Supply chain metrics require the same observations, only instead of driving a car purchase, they speak to something far more important.
An important goal of supply chain analytics is to improve forecasting and efficiency and be more responsive to customer. Performance measurement phase ii a framework for action. Implementing supply chain performance indicators or metrics is one of the. Supply chain metrics that matter is a series of monthly reports published from august, 2012 through present time by supply chain insights llc. Performance measurement a report by the hospital supply.
The goal of these metrics is to provide a key set of indicators, aligned with the business strategy, that provide early warnings of problems or early signals of successful project completion. Performance measures and metrics in logistics and supply. Chain metrics working group, their work is set out in the report. Supply chain management is the integration of key business processes from end user through. Ask any supply chain leader which metrics are the most important to deliver, and the most common answers are operating margin, inventory turns, and revenue growth. The information on this page will help you get it right. Performance metrics in supply chain management article pdf available in journal of the operational research society 005. However, some measures are still in need of manual handling, which takes time and. The gartner supply chain hierarchy of metrics benchmarking.
Many supply chain management decisions continue to be made as though driving with the rear view mirror. Now gartner has translated this framework into a dynamic benchmark database that enables you to compare key supply chain performance metrics with your peers. Supply chains typically generate massive amounts of data. They allow organizations to analyze risks and provide supply chain managers. Standardize scorecard metrics hidas channel partnership council provides scorecarding best practices guide. Supply chain analytics is the application of mathematics, statistics, predictive modeling and machinelearning techniques to find meaningful patterns and knowledge in order, shipment and transactional and sensor data. However, at the orga nizational level, inventory turnover ratio edges out ppv for the top spot.
Theres a variety of metrics available when assessing supply chain performance metrics and each provide a different perspective of the piece of the supply chain it measures. Supply chain management includes the activities inside and outside the organization that are done by that particular organization in order to deliver the high values to customers. The blog focuses on the use of enterprise applications to drive supply chain excellence. Ultimately and ideally, supplier performance scorecards containing a rollup or summary view of all results. Supply chain analytics helps to make sense of all this data uncovering patterns and generating insights. Supply chain metrics that matter supply chain insights. Always update books hourly, if not looking, search in the book search column. The performance of the supply chain function is measured by metrics grouped in 4 attributes. The department of defense dod supply chain metrics guide is the main source. Metrics that express the level of ontime deliveries, ontime receipts, time to process purchase orders, and time to. Try to maintain extra metrics as secondary diagnostics though and keep your highlevel, crossfunctional kpis at the forefront. Distributors report continued customer consolidation in 2018. Although this framework is generally viewed from the top down, in many instances, a study of the six drivers may indicate the need to change the supply.
Metrics play a key role in the profitable management of a warehouse and in an organizations overall supply chain success. Metrics supporting supply chain leverage strive to reduce the cashtocash conversion cycle time including days of inventory while maintaining targeted customer service levels. Performance measures and metrics in logistics and supply chain management. Stanford supply chain forum call it distribution or logistics or supply chain management. When selecting a performance metric to use, a company should examine different characteristics that align with their business. Measuring supply chain performance through kpi identification. Measuring supply chain performance through kpi identification and. Supply chain metrics that matter was written to guide businesses through the change process with a measurementbased outlook that will help any organization stand the test of time.
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