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