How to conquer the effective frontier and drive improved value in global operations growth has slowed. Jun 27, 2016 supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. They allow organizations to analyze risks and provide supply chain managers. Rob shillinger, consulting manager, analytics at hitachi solutions, discusses the challenges organizations. Supply chain metrics that matter is a story about how to do just that. Supply chain metrics that measure up supply and demand. 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.
Supply chain metrics that matter was written to guide businesses through the change process with a measurementbased outlook that will help any organization stand the test of time. Although largely dominated by logistics, the contemporary concept of scm encompasses more than just logistics cooper et al. The 15 supply chain metrics that make or break warehouse efficiency 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 shipping and handling. There are hundreds of metrics that can be used to score supply chain management performance. Chain metrics that matter report, we share insights from each of these metrics categories. Supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. For example, a cashtocash cycle time metrics framework should be linked to return on assets, a total supply chain cost metrics framework should be linked to net margin through cost of goods sold cogs, and so on.
The 3 key supply chain metrics to improve your performance. Give your data purpose so you can effectively manage your supply chain metrics. In this report, we share a framework for supply chain excellence that balances growth, profitability, cycles and complexity metrics. 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. Every company today runs on data the key to using your data is choosing the right metrics for visibility into your supply chain. The 15 supply chain metrics that make or break warehouse. In celebration of the launch of lora ceceres second book metrics that matter, join lora and a group of guest panelists as they discuss insights from the book and how it relates to their companies. The text that appears on this website is the opinion of the webmaster. Simple metrics for your supply chain how to define the first key measurements overview those who have been watching the supply chain management industry over the last few years may have noticed the acceleration in the level of sophistication in supply chain management metrics.
Jan 26, 2017 supply chain metrics that matter book discussion in celebration of the launch of lora ceceres second book metrics that matter, join lora and a group of guest panelists as they discuss insights. Supply chain leader interview for metrics that matter my kitchen table is piled high with interviews for the upcoming book, metrics that matter. Especially through analyzing and improving the supply chain, significantly increased performance can be achieved. Supply chain metrics that matter strategic management. Metrics may or may not be uniform across all industries. Cecere is the founder of the research firm supply chain insights. Supply chain metrics that matter book discussion in celebration of the launch of lora ceceres second book metrics that matter, join lora and a. In todays highly global and highly competitive marketplace, most businesses have realized the value of investing in supply chain improvement. In this report series we provide a deep focus on progress over the past. Jun 01, 2015 this is a recording of our webinar, metrics that matter. This process is used to link supply chain metrics to financial key performance indicators kpis. This concept has been attributed to such varied sources as management guru peter drucker, sir william thomson, also known as lord kelvin, and w. The supply chain customer metrics i am used to hearing discussed are often contributors to the perfect order metric orders shipped complete. Of course, whenever investments are made, there must be an analysis of their returns.
This concept has been attributed to such varied sources as management guru peter drucker, sir william thomson, also known as lord. Supply chain metrics that matter is a series of industryspecific reports published throughout the year by supply chain insights llc. Supply chain metrics that matter by lora cecere supply. A lot of companies use supply chain metrics that might be easy to calculate but dont help drive improvements. Best practices in business technology management pdf free. 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. The supply chain metrics that matter report series is an analysis of supply chain excellence for a specific industry. This is the actual scorecard with supply chain measures and performance indicators. How to conquer the effective frontier and drive improve. Supply chain metrics are an important tool for measuring progress against goals, and benchmarking is an excellent way to establish the goals for improvement programs.
Supply chains can become incredibly complex and in reality even the simplest flow of materials requires supply chain management. Due to the fact that the supply chain is a complex system that must be managed holistically, we. Armies of management consultants have come up with ways to integrate supply chain metrics into the balanced score cards that are used to run companies. The following four key metrics tell the performance story when it comes to supply chain effectiveness. Sep 04, 2017 when i meet with my customers, i get thumbsdown feedback. Track critical parts of supply chain with ready to use kpis. May 14, 2007 this process is used to link supply chain metrics to financial key performance indicators kpis. Very complex supply chains tend to offer such a huge amount of. Supply chain metrics that matter 2014, by lora cecere. Walmart raising the supply chain metrics bar lma consulting. For that reason, most businesses have also created metrics that document realworld supply chain performance and track changes over time.
Partner at altimeter group leader in open research. Supply chain measurements or metrics such as inventory turns, cycle time, dpmo and fill rate are used to track supply chain performance. Within the world of supply chain management scm, each industry is unique. Supply chain metrics that matter book discussion 15 may 2014. In fact, customers are a little sharpereyed than one might assume. Without somebody to take care of the mechanics of a supply chain, it would probably break down in fairly short order. The industries that are profiled in this report each operate in a process manufacturing environment.
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. Metrics programs are key to supply chain success step 1. Commonly used by supply chain management, metrics can help you to understand how your company is operating over a given period of time. The financial ratios used enable supply chain leaders to better understand where the industry is on the. Supply chain metrics that matter publications in that it focuses upon the relationship of different cost metrics within several industries. Sep 27, 2012 supply chain metrics that matter will be a series of reports published intermittently throughout the year by supply chain insights llc. When i meet with my customers, i get thumbsdown feedback.
Peppered with realworld examples from across industries, supply chain metrics that matter reinforces ideas with evidence. 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. Focusing on metrics that are imperfect or not meaningful can have serious impact, leading management to make poor decisions that hurt the. Volatility has increased and the world is more global. This is a recording of our webinar, metrics that matter. Fixing the supply chain far down the value chain, make semiconductors a classic case study for supplychain problems ranging from pig cycles to bullwhip effects.
Her blog focuses on the use of enterprise applications to drive supply chain excellence. Last week i attended a freshman convocation at temple university for the graduating class of 2019, and i was struck by one of the facts presented. 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. Cecere is a supply chain researcher as well as an authority in supply chain. Supply chain metrics that matter makes this truth clear enough with its thorough analysis of recent multiindustry performance trends. 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. But as anyone working in the manufacturing industry knows, there is a lot of work that goes into ensuring everything goes smoothly. Manufacturing is the backbone to most of what we take for granted. Update on the progress of supply chain leaders on progress on the supply chain effective frontier balancing growth, profitability, cycles and complexity.
And some companies use a variety of sometimes complex metrics that may not be telling them anything useful. In each supply chain metrics that matter report, we share insights from each of these metrics categories. Mar 10, 2016 supply chains can become incredibly complex and in reality even the simplest flow of materials requires supply chain management. The book links corporate financials to supply chain maturity.
This trend demonstrates the growing sophistication of manufacturers supply chain management efforts and the increased clout customers carry. Dec 22, 2014 supply chain metrics that matter was written to guide businesses through the change process with a measurementbased outlook that will help any organization stand the test of time. Supply chain metrics that matter will be a series of reports published intermittently throughout the year by supply chain insights llc. The total cost of all business functions involved in procurement orders, including planning, purchasing, inventory control, traffic, receiving, incoming inspection and salvage. Creating highimpact supply chain metrics supply chain 247.
To help companies understand differences, each report is a deep dive on a different industry. Philippe lambotte, svp of merck, recommends a seat at the table, focus on supply chain strategy, eliminate the. Philippe lambotte, svp of merck, recommends a seat at the table, focus on supply chain strategy, eliminate the white noise, and stay the course. I find the measurement of customer service to be one of the most difficult. Most discussions and articles about supply chain metrics are, in actuality, about internal logistics performance measures. Further reproduction prohibited without permission. Supply chain metrics that matter supply chain movement.
Jul 20, 2016 armies of management consultants have come up with ways to integrate supply chain metrics into the balanced score cards that are used to run companies. What is supply chain management and why does it matter. Supply chain metrics that matter is a series of reports published throughout the year by supply. These reports are based on data collected from financial balance sheets and income statements over the period of 20002012. The series starts in may when fullyear corporate reporting is complete for the prior year.
Oct 11, 2015 last week i attended a freshman convocation at temple university for the graduating class of 2019, and i was struck by one of the facts presented. 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. As an example, the supply chain leverage of several worldclass companies has set the bar quite high. Supply chain metrics that matter supply chain insights. 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. When your company implements a new supply chain execution system warehouse, labor. Supply chain metrics that matter linkedin slideshare. Dec 08, 2014 supply chain metrics that matter is a story about how to do just that. In our plotting of industry results for the supply chain metrics that matter report s, we could see that certain. As called out by dod supply chain materiel management procedures in dod manual 4140. Ultimately, its up to you to prioritize which supply chain metrics are important and how they will be used.
Aug 25, 2014 supply chain metrics that matter book. Walmart raising the supply chain metrics bar one of my clients forwarded this business insider article about walmarts supply chain metrics. As the founder of supply chain insights and the author of supply chain shaman, lora travels the world to chart the course of supply chain practices and disruptive technologies. In the book, the author analyzes which metrics matter. I then pack my bags and scoot out the door to sign books and discuss the research completed for the s upply chain metrics that matter book at the ism event on thursday, may 14th in atlanta. The lack of a widely accepted definition for supply chain management and. Forty years ago as a chemical engineering student, i learned the tedious craft of chemical plant design. By using a fictionalized case that aggregates the authors three years of intensive research, supply chain metrics that matter provides an engaging and useful way to. In this report we take a closer look at, and share insights on, the hightech industry. Cecere is a supply chain researcher as well as an authority in supply chain technology. We believe that it is dangerous to list all industries in a.
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