Supply Chain Performance Metrics

Abstract

Every CEO must always be concerned with the competition. In today's economy the battlefield is shifting from individual company performance to what we call Supply Chain Performance. Supply Chain Performance refers to the extended supply chain's activities in meeting endcustomer requirements, including product availability, on-time delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner. Supply Chain Performance crosses company boundaries since it includes basic materials, components, subassemblies and finished products, and distribution through various channels to the end customer. It also crosses traditional functional organization lines such as procurement, manufacturing, distribution, marketing & sales, and research & development.To win in the new environment, supply chains need continuous improvement. To achieve this we need performance measures, or "metrics," which support global Supply Chain Performance improvements rather than narrow company-specific or function-specific (silo) metrics which inhibit chain-wide improvements. We describe a number of supply chain performance measures that are expressly designed to support and monitor Supply Chain Performance improvements across the supply chain and illustrate the shortcomings of several common metrics.Charlie slammed the door on the way out of his boss's office. As operations manager for a major aluminum processing facility, he was proud of the fact that he had in past months achieved significantly high production figures for high margin specialty milled orders. But his boss had just berated him for producing fewer tons of low margin aluminum than budgeted. Charlie was a victim of a "bad'' performance measure or metric. Raw tonnage is an inappropriate measure of supply chain performance for a diverse product line where gross margin per ton varies considerably. The use of "bad'' metrics can be a major impediment to the implementation of effective integrated supply chain management in today's highly competitive business environment.

Performance metrics in supply chain management

“…Our survey suggests the following major challenges for researchers in SCM. 21 and others recommend metrics for the SC as a whole, whereas we assert that such information may be important input for predicting the BSC (output) metrics of a specific company. (iii) Design a simulation model that explains how the SC's performance metrics react to environmental and managerial control factors.…”

“…For example, Hausman 21 describes a number of metrics expressly designed to monitor performance across the whole SC. As an example, he mentions that Compaq measures both its own inventory and the downstream inventories at its distributors.…”

The Impact of Supply Chain Cooperative Relationship on Performance: A Knowledge Management Perspective

“…And Supply Chain Performance refers to the extended supply chain's activities in meeting end-customer requirements, including product availability, on-time delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner [2]. According to relative literature reviews, we find previous studies show supply chain cooperative relationship is positively related to its performance.…”

Pengaruh integrasi, berbagi informasi, dan penundaan pada kinerja rantai pasokan: Studi pada usaha kecil menengah batik di Indonesia

“…Untuk menang dalam lingkungan yang baru, rantai pasokan perlu dikembangkan secara berkelanjutan yang membutuhkan pengukuran kinerja untuk mencapainya (Hausman, 2002). Kinerja rantai pasokan harus diukur untuk mengkaji seberapa efisien rantai pasokan (Sillanpää, 2015).…”