This project offers a set of metrics that provide supply chain managers with a forwardlooking. When it comes to measuring the health and performance of your supply chain, qualityin terms of kpisis usually better than quantity, and a simple hierarchy of metrics comprising 17 kpis is typically sufficient for any company to assess supply chain performance, conduct initial problemdiagnosis, and even drill down to the root causes. The diagnostic or level2 metrics are useful to diagnose performance issues. The proposed paper is focused on measurement and evaluation of supply chain performance in order to its sustainable improvement. Walmart is not only requiring an increase in otif ontimeinfull delivery performance but it also will charge penalties for suppliers that dont live up to the metric. Within the supply chain world, each industry is unique.
Jay schofield may 28, 2015 maintaining an efficient warehouse means understanding the importance of your companys supply chain the sequence of processes involved in turning a customers order into a delivered product, from the procurement of raw materials to. In the book, the author analyzes which metrics matter. Its a wellknown management axiom that you cant improve what you dont measure. Track critical parts of supply chain with ready to use kpis supply chain balanced scorecard was designed to help in measuring and controlling company delivery service and associated aspects. If youre not up on those commands you could turn to pdf chain.
But as anyone working in the manufacturing industry knows, there is a lot of work that goes into ensuring everything goes smoothly. Armed with common metrics and consistent data, companies can begin the important step of conducting a post merger supply chain assessment. Pdf effects of acquisitions and mergers on supply chain structure. Jan 03, 2007 for instance, supply chain managers point to procurement and supply chain expertise on the due diligence team, and the establishment of a comprehensive plan, as critical to successful merger. Order status metrics track the realtime status of all orders and categorizes them based on the action taken, such as backordered, on hold, or shipped. Managing all the moving parts in your supply chain can be a logistical nightmare unless you have access to the right kpis and metrics. The second part of druckers quote, if you cant measure it, you cant improve it, really brings home the importance of having the right set of metrics. In fact, if you want to achieve the dream of having a supply chain that has direct communication with the customer, youll need to make sure youre. The 15 supply chain metrics that make or break warehouse efficiency posted by. For instance, supply chain managers point to procurement and supply chain expertise on the due diligence team, and the establishment of a comprehensive plan, as critical to successful merger. Metrics for effective supply chain execution now well look at specific examples of some of the more common and effective metrics used in warehousing and distribution to give you a good head start on developing your own. Supply chain metrics require the same observations, only instead of driving a car purchase, they speak to something far more important. The pre merger team also assisted with the delivery of.
Editors pick kenco group logistics supply chain metrics. The value of supply chain metrics depends on your supply chain objectives and how they support your business strategy. Metric computation of explanation metrics definition metrics 7. May 28, 2015 the 15 supply chain metrics that make or break warehouse efficiency posted by. The objective of this document is define a bench marking framework capable of. R ecently, institute for supply man age ment ism surveyed supply chain leaders about departmental performance metrics. Pdf most discussions and articles about supply chain metrics are, in actuality, about internal logistics performance measures. The research shows that continually building value at all points along the value chain is the key to sustained success. Order status metrics supply chain kpi examples klipfolio. Our primary focus is on inventoryrelated supply chain metrics, while other. The goal is to help supply chain leaders understand what is possible in driving supply chain excellence programs. Commonly used by supply chain management, metrics can help you to understand how your company is operating over a given period of time.
The 3 key supply chain metrics to improve your performance. Supply chain executives can play a pivotal role in delivering synergies that can help achieve deal objectives. Supply chain metrics metrics supply chain process source definition metric 1 explanation\metrics definition. For information on inventory turns, fill rate measurement, backorder reporting or any other logistics supply chain management measurements metric, click on the links to the left.
It argues that some of the most commonly used metrics are not the best ones to use when trying to determine how much return on investment you are seeing with your current processes. The book links corporate financials to supply chain maturity. The metrics are categorized for each stage of the supply chain with definition provided at the back of the document. The performance of the supply chain function is measured by metrics grouped in 4 attributes. Merge, split, and watermark your pdfs with pdf chain. If youre really up on your pdf toolkit commands you could easily do this from the terminal window. Explanationmetrics definition annual cost of goods sold company. Dependability, responsiveness, cost, asset efficiency. Walmart raising the supply chain metrics bar lma consulting. Metric computation of explanationmetrics definition metrics 1. This industry has built global supply chains and successfully executed a myriad of mergers and.
Cecere is a supply chain researcher as well as an authority in supply chain technology. Understanding of metrics used for supply chain management jakub jancik1, bedrich e. Jun 27, 2016 supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. The guide also includes functional level metrics that measure performance specific to the functions of inventory management and distribution management. Measuring the sustainability of global supply chains journal of. 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. They allow organizations to analyze risks and provide supply chain managers.
Aug 30, 20 update on the progress of supply chain leaders on progress on the supply chain effective frontier balancing growth, profitability, cycles and complexity. These custom alerts can be assigned via tasks to fellow employees to align and resolve negative trends and issues. Are they likely to change or be perceived differently as a result of an erp implementation. The series starts in may when fullyear corporate reporting is complete for the prior year. Lets take a look at some of the most commonly used metrics for supply chain success.
Key words mergers and acquisitions, supply chain structure, supply. Manufacturing lead times possibly no other supply chain conversation more closely resembles the biblical phenomena of talking in tongues as trying to have a group define what a manufacturing lead time is. 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. Further reproduction prohibited without permission. The research shows that continually building value at all points along. These reports, by supply chain insights llc, were published in a series called supply chain metrics that matter during the period of august 2012 through august 2015. Supply chains to admire 2015 a study of supply chain excellence.
Modern supply chain execution systems warehouse, labor, and transportation produce a. Update on the progress of supply chain leaders on progress on the supply chain effective frontier balancing growth, profitability, cycles and complexity. Many supply chain management decisions continue to be made as though driving with the rear view mirror. The dod supply chain metrics guide is the result of collaboration with the military departments. In a business landscape setting in to focus heavily on providing a great customer experience, perfect order measurement is one of the most important metrics youll want to keep an eye on.
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. Supply chain metrics that matter makes this truth clear enough with its thorough analysis of recent multiindustry performance trends. Give your data purpose so you can effectively manage your supply chain metrics. When it comes to supply chain metrics, beauty is in the eye of the beholder. To meet synergy goals, executives should proactively identify potential supply chain sources of value during a transactions due diligence and. Supply chain metrics that matter is a series of industryspecific reports published throughout the year by supply chain insights llc. The 15 supply chain metrics that make or break warehouse. Pdf effects of acquisitions and mergers on supply chain. 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. This white paper discusses metrics that are used to measure supply chain performance. There are many supply chain metrics such as leadtime, inventory levels. Ask any supply chain leader which metrics are the most important to deliver, and the most. Effects of acquisitions and mergers on supply chain structure and strategy case study approach conference paper pdf available june 2015 with 2,395 reads how we measure reads.
Sep 04, 2017 when i meet with my customers, i get thumbsdown feedback. You need to track the current status of shipments, monitor inventory levels and ensure that all orders you ship are completely accurate. A supply chain perspective on achieving high performance by tom herd, arun k. It is exciting to have two years of research, nine months of writing, and four months of editing become crisp, fresh pages. For example, one company might measure delivery performance against the customers desired date, while another may measure delivery against a negotiated delivery date.
Metrics may or may not be uniform across all industries. 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. We have collected the most important supply chain metrics for you. This data may be presented in many different ways since it incorporates information related to the specific circumstances of your supply chain. We examine current technology used to drive the supply chain, including enterprise resource planning erp systems, backoffice systems, and infrastructure. The study provides a snapshot of metrics currently being used by supply chain and procurement departments to. Supply chain metrics that matter will be a series of reports published intermittently throughout the year by supply chain insights.
Pdf this survey paper starts with a critical analysis of various performance metrics for supply chain management. Supply chains to admire 2015 supply chain insights global. One would think that a measurement is a measurement, and performance in one system would be the same as performance in another system. Building a customercentric supply chain doesnt happen without planning and strategic decisionmaking. Is your supply chainprocurement department tracking and reporting the correct measures. How to create an effective supply chain with erp 3. The supply chain metrics that matter report series is an analysis of supply chain excellence for a specific industry. Measuring supply chain performance through kpi identification and. We empirically analyze the effects of horizontal mergers and acquisitions on the performance of the merging firms. These reports, by supply chain insights llc, were published in a series called supply chain metrics. Supply chain measurements or metrics such as inventory turns, cycle time, dpmo and fill rate are used to track supply chain performance. Insights on reliability at the intersection of operating margin and inventory turns. Capturing synergies before the deal closes by kris timmermans, axel savoye, laurent delsaux and armando diaz.
Supply chain metrics metrics supply chain process source. The main goal is to suggest categorization of metrics and examine each category in order to verify whether. Supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. In this report series we provide a deep focus on progress over the past. Updating the supplychain councils implementation model. Pdf chain is a graphical front end for the pdf toolkit which allows you to merge, split, watermark, rotate, add attachments to, and set permissions for existing pdf documents. What are your supply chains key performance measurements. For each level 1 performance metric, the template includes a working definition, benchmark sources, main level 2 components, main level 3 components, and a simple data keeping scor updating the supplychain councils. Then, we make recommendations for and help you implement an integrated approach aligned with your future strategy. There are hundreds of metrics that can be used to score supply chain management performance. The goal of the post merger supply chain assessment is to. This concept has been attributed to such varied sources as management guru peter drucker, sir william thomson, also known as lord kelvin, and w. May 25, 2017 when it comes to measuring the health and performance of your supply chain, qualityin terms of kpisis usually better than quantity, and a simple hierarchy of metrics comprising 17 kpis is typically sufficient for any company to assess supply chain performance, conduct initial problemdiagnosis, and even drill down to the root causes. In our plotting of industry results for the supply chain metrics that matter report s, we could see that certain industries had greater variation at the intersection of operating.
Is your supply chain procurement department tracking and reporting the correct measures. Supply chain metrics gaining visibility in a datarich world. Supply chain leader interview for metrics that matter my kitchen table is piled high with interviews for the upcoming book, metrics that matter. The observations from these deep industryspecific studies of supply chain performance helped us to build a methodology to judge. The text that appears on this website is the opinion of the webmaster. Review the existing organizational structure and identify improvement opportunities. Assess each pre merger entitys competence in five key areas. Being able to measure supply chain performance is important since it leads to a. Corporate performance is not a set it and forget it proposition. Manufacturing is the backbone to most of what we take for granted. Philippe lambotte, svp of merck, recommends a seat at the table, focus on supply chain strategy, eliminate the. Pdf empowerment of enterprises through mergers and acquisition is.
The effective supply chain makes a difference in winning a war, saving a patient, and driving commerce. What is the estimated these costs include wages, overtime, and order management benefits of order processing personnel, any cost. These different attributes can be merged into one universal metric, labelled. Tei helps us to combine the gross margin and turnover. Walmart raising the supply chain metrics bar one of my clients forwarded this business insider article about walmarts supply chain metrics. When i meet with my customers, i get thumbsdown feedback. Improve supply chain visibility using the tradecloud b2b platform. Common metrics allow the postmerger organization to compare the legacy supply chains in a rational manner and to assess which parts should be kept, which. Improve your supply chain performance today with sap supply chain control tower.
In this report we take a closer look at, and share insights on, the hightech industry. Philippe lambotte, svp of merck, recommends a seat at the table, focus on supply chain strategy, eliminate the white noise, and stay the course. When it comes to supply chain metrics, beauty is in. Supply chain metrics, sap control towers custom alerts grant users fast and precise overview of the most important issues. Through our experience and analysis, accenture has come to realize that the supply chain is one functional area that has a direct impact on all four major types of synergies that can result from a merger. If we define the supply chain as the core set of processes that link suppliers to customers via the valueadding manufacturing process, then the objectives are clear. Performance metrics in supply chain management article pdf available in journal of the operational research society 005. The goal of this series is to share this understanding.
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