Design supply chain metrics
That magical period of family time and retail bliss around Christmas can be made good or broken through poor supply chain metric (SCM) design. The supply chain manager has the dreams and hopes for many millions of children resting on their shoulders!
What is supply chain management
Which supply chain metrics require attention?
There are many metrics to be considered and these need to be understood in each of their segment areas. I have created the main segment and some key metric idea areas for your attention.
The necessary skills, training and mastery of the correct abilities to ensure an effective SCM team supports and organization is critical. The best systems and tools in the business still rely upon the human interaction points.
SCM teams need to have the correct technology to interact with a wide range of systems both internally and externally. There is often the need to understand various autonomous systems not owned or managed by the actual supply firm but owned by a 3rd party logistics provider (3PL) or customer systems.
Accuracy of specification and order quality. Cost control through price, terms and conditions, quality and regulatory metric governance.
The customer service team or customer service program should be designed and be transparent to allow the correct accurate information across the whole business system. Here we can see the need for close collaboration between the supply chain manager and the customer service manager.
Cycle times, up-time maintenance, availability, production flow, minimum quantity numbers, raw material availability, quality, tooling replacement and life costs.
Availability, quantity, environmental protection, branding, correct label and identification.
People and weight carry limitations. Manual equipment and automated equipment needed. Skill levels to use equipment, service, maintenance, up-time rates, cost, availability, damage.
Frequency of pick up and delivery, on-time pick up, online delivery rates, costs, time taken, border control management, door to door, accident risk management and peak time availability.
Inventory and warehousing
Shelf life of fast moving consumable goods (FMCG), cost of storage at the supplier, 3PL, own business or at customer location, Security, capacity of storage and demand forecasting.
Supply chain manager kpi's
With such a long list of potential metric areas in a product supply business there is little wonder why some companies develop a high reputation in specific areas. The most important metric area needs to be surrounding customer service. By forming a solid relationship and understanding of your customers need it becomes possible not just to meet their needs but to also anticipate and delight them.
The need to understand operational and strategic metrics is important for the sustained performance of a supply chain and effective logistics service.
Where a supply chain manager does not have the resources to manage, influence to improve the performance of the metric areas above then millions of children’s Christmas dream may be dashed already.
Unique metrics design for SCM
To create a high performance business the design of SCM metrics will need to be unique and specifically constructed for each business. They start with an understanding of the market expectations and your business goals.
The variables of sample size, frequency of measures, units used, method of communication and levels of authority to take action upon the metrics used should align to the company values.
Specific pointers ! Cash flow metrics, turn rate of products, on time delivery rates, time from order to delivery, cost and accuracy of logistics costs are all key areas for most product companies.
All of this article has been to focus on the correct measures and metrics. From this we generate the data which can then be used within analytics to find relevant information.
How to create KPI's
The right metrics and KPI's with your critical success factors
See our dedicated page about Metrics
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