Supply chain management resources


Supply Chain Kpi's - Understanding Supply Chain Metrics And Choosing The Right Kpi's To Measure

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



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