Since the bronze age five thousand years ago, the link between merchants bringing in the required resources to artisans requiring those resources has been the defining element of. Many supply chain management decisions continue to be made as though driving with the rear view mirror. 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. Enablers add to the complexitywhile traditional measurement focuses solely on operational performance indicators such as cycle times and inventory levels, companies also need to bring into. These tsc metrics are important as they comprise 80% of the dsc scorecard. The strategic or level1 metrics measure the overall performance of the supply chain. Performance measures and metrics in logistics and supply. Metrics should measure the supply chain, not its logistics components. Editors pick kenco group logistics supply chain metrics. What are integrated performance measures for supply chains. Metrics for any lean supply chain how to eliminate waste and establish an agile supply chain. Introducing the gartner supply chain hierarchy of metrics. Supply chain metrics that matter is a series of monthly reports published from august, 2012 through present time by supply chain insights llc. The guide also includes functional level metrics that measure performance specific to the functions of inventory management and distribution management.
The gartner hierarchy of supply chain metrics has long been regarded as the industry standard for endtoend supply chain performance measurement. We believe that it is dangerous to list all industries in a. Such computations do not measure the supply chain or its performance and can include factors outside of the supply chain. Metrics play a key role in the profitable management of a warehouse and in an organizations overall supply chain success. Understand the structure of scor there are over 250 scor metrics that are organized in a hierarchical and codified structure from organization level 1 to process level 2 to diagnostic level 3. In our plotting of industry results for the supply chain metrics. Chain metrics working group, their work is set out in the report. The supply chain must then use the three logistical and three crossfunctional drivers to reach the performance level the supply chain strategy dictates and maximize the supply chain profits. The purpose of supply chain integration is to break down the silos across the whole supply chain, allowing the firm to move closer to overall optimized rather than suboptimized management. Short cycles make for a more efficient and agile supply chain. All 17 key metrics for supply chain management that you. Supply chain metrics that matter supply chain insights. Cecere is a supply chain researcher as well as an authority in supply chain. Implement new or improved supply chain processes and develop measurable performance metrics.
What are supply chain metrics and how are they most useful. The book links corporate financials to supply chain maturity. The second section outlines a new set of essential metrics for a digital supply chain which will show how these metrics. Supply chain performance refers to the extended supply chain s activities in meeting endcustomer requirements, including product availability, ontime delivery, and all the necessary inventory. Supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. All 17 key metrics for supply chain management that you ever. Do you know how many fgs are leaving the ndc in ltl quantities. Now gartner has translated this framework into a dynamic benchmark database that enables you to compare key supply chain performance metrics.
Performance measurement a report by the hospital supply. Implementing supply chain performance indicators or metrics is one of the simplest, least expensive t in operations. Theres a wide variety of metrics available when assessing supply chain performance metrics and each will provide a slightly different perspective of the piece of the supply chain it measures. Measuring supply chain performance usaid global health. Measuring supply chain performance through kpi identification and. Supply chain management is a process that is often measured on its logistics costs. Supply chain metrics require the same observations, only instead of driving a car purchase, they speak to something far more important.
The dod supply chain metrics guide is the result of collaboration with the military departments. Your home business can collect important supply chain metrics. Supply chain cycle time indicates the overall efficiency of the supply chain. The performance of the supply chain function is measured by metrics grouped in 4 attributes. In the book, the author analyzes which metrics matter. The iadc supply chain committee recognizes there are many other valuable metrics available to measure suppliers performance the committee considers the. Analysis of this critical metric can help recognize pain points or competitive advantages. The top five supply chain metrics reported organizationally are the same as those reported departmentally, namely ppv, inventory turnover ratio, %total spend managed, total spend revenue, and dio. Performance measurement a report by the hospital supply chain metrics working group. Performance metrics in supply chain management article pdf available in journal of the operational research society 005. The gartner supply chain benchmarking database includes 17 metrics across seven core process areas spanning multiple industries and geographies. 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. 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. The complete guide to supply chain metrics supply chain brain.
Do you know what it means to have a perfect order measure of 94%. As logistic managers need sufficient information and visibility not only within their organization but also across their supply chains, the proper set of metrics is. Companies must focus on two dimensions of performance to ensure supply chain. Supply chain management kpi encyclopedia these kpis are further categorized into seven major groups. There are hundreds of metrics that can be used to score supply chain management performance. This project offers a set of metrics that provide supply chain. Further reproduction prohibited without permission. Design and implement supply chains that support business strategies to adapt to changing market conditions, new business opportunities, or cost reduction strategies. The gartner supply chain hierarchy of metrics benchmarking. Section 1 introduction and concepts logistics is not a new concept. Time when companies look at selecting supply chain performance metrics, they usually will examine those metrics that relate to time, as they are easily calculated, easily understood, and clearly show operational effectiveness.
The present articule compiles several aplications and the best practices of scor model in the world. Supply chain metrics scm supply chain resource cooperative. The study provides a snapshot of metrics currently being used by supply chain. Improve supply chain visibility using the tradecloud b2b platform. A performance attribute is a grouping or categorization of metrics. The dod supply chain metrics guide is the result of collaboration with the military departments, the defense logistics agency, and the u. We have collected the most important supply chain metrics for you. Dependability, responsiveness, cost, asset efficiency.
Purchase this document today to identify and begin measuring the right metrics to measure supply chain. For any company, an accurate overview of performance is essential. Pdf most discussions and articles about supply chain metrics are, in actuality, about internal logistics performance measures. The metrics are categorized in five performance attributes. Performance measures and metrics in logistics and supply chain management.
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