Putting Supply Chain Performance at Your Fingertips– kpi supply chain

Putting Supply Chain Performance at Your Fingertips– kpi supply chain

In this post, you can ref free useful materials about kpi supply chain and other materials for kpi supply chain such as kpi tips, kpi mistakes, kpi examples, kpi supply chain, kpi dashboard, kpi form, how to create kpi/performance metrics

If you need free ebook:

• List of free 2436 KPIs

• Top 28 performance appraisal forms

• 11 performance appraisal methods

• 1125 performance review phrases

please visit: kpi123.com

KPI guides

Is your company run on intuition? Or do you have a set of metrics that help steer you in the right direction and anticipate curves and bumps in the road ahead? Chances are the latter speaks of your corporate culture, and it should. Each of us has an objective that should align with the corporate strategy and our performance is measured relative to that objective. For the majority of companies this is a high-level activity taking into account a broad set of data points that have been trusted for decades—sales, inventory, etc.

In today’s rapidly changing global marketplace you need to go further, drill down deeper into the supply chain to see the real indicators of success or impending danger. Supply chain analytics can tell you more about your organisation’s path than you likely realise.

Proactive Management

Managers at strategic, tactical, and operational levels often find it difficult to move out of reactive mode and onto a course of informed, proactive decision-making. The last five-plus years show how difficult this is. As the financial crisis began there were signs of a slowdown in consumer spending and inventory levels rising. The signs were buried in spreadsheets and many companies were caught off guard. However, some were able to weather the crisis better than others.

There is no crystal ball or magic sauce. These companies had developed their supply chains based on an analytics and performance management foundation. These companies were directed to the metrics that matter, telling them to slow orders / manufacturing. While other companies were forced to react to the drop in demand, the proactive organisations had slowed down ahead of the crisis and were able to sustain their businesses without dramatic impacts to their margins and service levels.

 Setting the Course

In order to focus on the actions that make the greatest impact on the business you need to identify the right information and make it easily accessible. Today, we are awash with data. Every system in place produces more information than any team can process. The key is to identify the right insights to focus our valuable human resources on the right actions. By focusing on well-chosen real-time metrics, companies are able to pro-actively monitor, measure, control, and correct the key drivers of business performance. Rather than running reports or populating spreadsheets, hoping to gain insight from past performance into where and how adjustments can be made to improve future efficiency, they infuse the entire supply chain with the ability to sense and correct deviations from optimal performance every day. This is how a supply chain built on an analytics and performance management foundation creates an unfair competitive advantage.

 The Analytics Driven Supply Chain

When built into the fabric of the supply chain, the performance management function leverages analytics to improve future performance, placing actionable information at the fingertips of planners, senior executives, and stakeholders across the enterprise.

Performance management converts huge repositories of data into easily consumed knowledge that accelerates your time-to-alert, time-to-resolution, and prioritisation of high-value actions. It provides vital input to the sales and operations planning (S&OP) process, and helps find the “needle in a haystack” root causes of problems, rather than just flagging the symptoms.

Delivering actionable feedback across the extended supply chain network, an analytics and performance management-based architecture is built on three principles: metrics, such as key performance indicators (KPIs), proactive alerts triggered by exception conditions and sparking directed action to resolve an issue and reports pulling data from various data sources.

Predictive Analytics (forward-looking scenario analyses), is often broken out as a complementary function. While performance management shows how we are executing against plan (the “state of the union”), predictive analytics provides What-If comparisons, ad hoc assessments, and alternative going-forward scenarios.

 Make the Data Work for You

As noted in the example above, some companies are able to identify forthcoming changes in demand, manoeuver their business to minimise negative impact and, in some cases, take advantage of their competitors’ misfortunes. To do this, the organisations had developed several scenarios to help them identify how to move forward in the case of certain circumstances. By playing out each scenario on a virtual basis and seeing the impact each had allowed them to implement the correct plan at just the right time.

Your organisation should utilise both predictive analytics and performance management based on KPIs and performance metrics created to reflect your business goals. A performance management-based architecture allows all stakeholders:

• To have visibility across all stages of the supply chain (Plan, Source, Produce, Store, and Deliver)
• To know how well the supply chain is performing against corporate goals
• To have access to KPIs that succinctly relay the vital signs of the supply chain and reflect the company’s unique business profile
• To share a central, common, cross-functional channel of communication
• To be able to identify and call attention to instances where the supply chain is deviating from plan
• To have hard data for decision-making at S&OP meetings

 Performance Management Foundation

Essential ingredients of a powerful performance management function include robust monitoring dashboards, automated management by exception, and proactive alerting that sparks immediate action to correct performance issues as they arise. As shown in Figure 1., a performance management-based architecture should be built in to all facets of the supply chain. Role-based views provide home page dashboards (“control towers”) tailored to the needs of individual stakeholders. Macro indicators provide broader stroke information for senior executives (e.g. service level by region or by priority customer, inventory turns, key customer service issues). Tactical feedback delivers the insights that managers need to keep the operations running to plan (order, shipment or replenishment exceptions, production issues).

What is a Key Performance Indicator (KPI)
How to Develop Key Performance Indicators (KPIs)

KPIs to Measure Green Supply Chain Success – kpi supply chain

KPIs to Measure Green Supply Chain Success – kpi supply chain

In this post, you can ref free useful materials about kpi supply chain and other materials for kpi supply chain such as kpi tips, kpi mistakes, kpi examples, kpi supply chain, kpi dashboard, kpi form, how to create kpi/performance metrics

If you need free ebook:

• List of free 2436 KPIs

• Top 28 performance appraisal forms

• 11 performance appraisal methods

• 1125 performance review phrases

please visit: kpi123.com

KPI guides

Many businesses have adopted better environmental practices, both to please their customers and to save money. After all, many of the things that are considered green practices are, in reality, actions that also increase efficiency and reduce operational costs. One way to begin the process is by creating a green supply chain, carefully monitoring the actions taken to protect the planet to make sure that they do not negatively impact the bottom line.
It wouldn't do any good, for example, to buy alternative-fuel delivery trucks if the vehicles cost so much that the fuel saved over their lifetime would not recoup the additional price. Key performance indexes (KPIs) help determine which green practices can be effectively incorporated into supply chains and which should be avoided.
KPIs may be needed to measure specific practices and sometimes individual equipment. Here are some KPIs which will help monitor a green supply chain's success.

KPIs for Equipment

• Operational Cost Savings — Any equipment that is designed to use less power, whether that be electricity or fuel, should provide some operational cost savings. If, however, that equipment is more expensive than standard models, a method needs to be created to compare the savings over the life of the item to the extra cost.
• Equipment Down Time — Some equipment that is green is also less likely to require repairs. For example, a cooler with better insulation does not need to run as often, thus saving wear and tear on its motor and condenser. When this is factored into the cost savings, the additional price may well be worth it.

KPI for Sales

• Sales Increase — This might seem like a KPI more appropriate for marketing, but since one reason for instituting a green supply chain is to enhance the business' reputation with the public, its success has to be monitored. Remember those alternative-fuel delivery trucks whose operational cost savings did not offset the extra expense of buying them? If an increase in sales can be traced back to them, then they may have a greater value than their cost.
• Sales to Advertising Ratio — If an advertising campaign is built around a company's green supply chain, a KPI will be needed to monitor the success of that campaign. If sales rise as a positive response to the company's environmental policies, then the ratio of advertizing dollars spent should go down compared to increased revenue.

Working up a KPI list can get complicated, but it needs to be discussed and agreed upon at the same time that the company makes plans to develop a green supply chain. Only with the right KPIs in place from the beginning can a business hope to monitor the success of their green supply chain.

What is a Key Performance Indicator (KPI)
How to Develop Key Performance Indicators (KPIs)

Six Common Pitfalls to Avoid When Designing Supply Chain KPI’s– kpi supply chain

Six Common Pitfalls to Avoid When Designing Supply Chain KPI’s– kpi supply chain

In this post, you can ref free useful materials about kpi supply chain and other materials for kpi supply chain such as kpi tips, kpi mistakes, kpi examples, kpi supply chain, kpi dashboard, kpi form, how to create kpi/performance metrics

If you need free ebook:

• List of free 2436 KPIs

• Top 28 performance appraisal forms

• 11 performance appraisal methods

• 1125 performance review phrases

please visit: kpi123.com

KPI guides

In my experience, many executives define their success based on competitors’ performance, size, and industry benchmarks. They rely heavily on a current year goal which is defined as an incremental gain over last year numbers.

At the end of the day, these might work as “targets”, but are they really metrics that you can manage a business around that has a significant supply chain component? I think not. Measuring performance as % gain over last year’s numbers, is possibly an indication of financial success, but it is not actionable.
By that I mean that nothing in the metric, or about the metric actually allow me to change the results of the metric.
With organizations that rely heavily on their supply chain, designing actionable performance level metrics, those that actually matter are even more important than the top level financial drivers. Why?
Because these metrics measure something that can be changed by realigning people, or improving processes. The incremental improvement in all these metrics ultimately result in improved financial performance. Unfortunately there is not one simple set of supply chain goals, as each organization is unique, and therefore requires its own set of metrics.
For some businesses, product customization is a key measure. For others, it is speed to market. Whatever the company’s unique strategic advantage, effective performance measurement begins by linking metrics to the corporate Mission, Vision and goals. Here are a few of the pitfalls I typically see companies encounter when designing their Business Intelligence and analytic systems:
Dirty data, which creates a lack of confidence in measurement results and raises more questions than it answers. This is also the number one reason the overall project might fail.
Too many metrics, usually resulting from a brain-storming session, or a lack of understanding as to which metrics are important.This leads to confusion and a lack of focus.
Stand-alone metrics, developed in a department, or by an SME that are functional and not linked to Mission, Vision or goals.
Conflicting metrics, especially when measuring things like inventory. A high fill-rate goals, could lead to inadvertently lead to inventory overstocks.
Outdated metrics, usually resulting from the “we’ve always done it that way” syndrome. These metrics fail to recognize the need for agility, a competitive differentiator in today’s market.
A lack of ownership, or executive buy-in that leads to missed targets and subsequent finger pointing.

What is a Key Performance Indicator (KPI)
How to Develop Key Performance Indicators (KPIs)