| Getting your supply chain management right can give | | | | will hide long delivery times for low value products |
| your business competitive advantage by lowering | | | | which may increase rather than decrease overall |
| costs, greater efficiency and improving customer | | | | customer satisfaction leading to a knock on effect in |
| satisfaction by getting goods to customers faster. | | | | customer care and contact center KPI's. |
| The impact of technology with the use of RFID tags | | | | With any KPI scorecard system, choosing the right |
| to track pallets and shipments electronically and | | | | metrics is essential and less is also more. Remember |
| merging this into the stock and order management | | | | Pareto's Principle, 80% of the benefit will be derived |
| system is making the SCM aspect of a business an | | | | from 20% of the activity - the same applies with |
| area of substantial opportunity for creating | | | | your metrics. Scorecards carrying twenty or thirty |
| competitive advantage. | | | | metrics are going to overload decision makers using |
| Now that all sounds fantastic with the ability to track | | | | the dashboard so keep it simple and reduce the |
| individual shipments through the supply chain and | | | | metrics being used to those that are essential. |
| maintaining data on product, serial codes, description, | | | | Allowing the metrics to be reduced means that |
| quantity and so on. Combining RFID data with | | | | managers can gain a far more intimate knowledge of |
| barcode information creates even more information | | | | what a metric is actually trying to tell them and this |
| that can be manipulated and collected. | | | | makes the difference between using the dashboard |
| In truth though, what we have is a KPI nightmare | | | | for a simple performance against target check and |
| with such a huge choice of metrics to choose from | | | | really unleashing the diagnostic and management |
| we are at serious risk of KPI overload with metrics | | | | power of a the KPI metrics. With the massive influx |
| duplicating information and business trends leading to | | | | of data that is being collected and collated by an |
| information overload for management. | | | | SCM system, it is very tempting to rush headlong |
| Remember that using KPI's effectively means that | | | | into trying to use all of this information. The fact is |
| you first must select the right metrics to measure | | | | that in those KPI systems where metric selection is |
| and ensure that managers fully understand what | | | | rigorously kept to a minimum, managers tend to |
| those metrics are actually telling them. The best | | | | make more successful decisions that their |
| metrics to use are those that combine in a ratio form | | | | counterparts operating a complicated, metric |
| and this means that we lose some of the underlying | | | | overloaded dashboard. |
| raw data trend that is available. Combining delivery | | | | The adage here is that less is more and following |
| time with order value will give us an index of how | | | | Pareto's Principle, 20% of your metrics are going to |
| well we are at getting our order pipeline to our | | | | give you 80% of the SCM information you really |
| customer base but the smoothing effect of the ratio | | | | need to make effective management decisions. |