Assignment Cover Sheet

This must be completed and added to the front of every assignment

Learner Name Himali Kaushalya De Silva

Learner Registration No. AP 00256 /OTL7L062022
Study Centre Name Apex Ed (Pvt) Ltd
Qualification Title OTHM Level 7 diploma in Logistics and Supply Chain Management
Unit Reference No. Y/618/1233
Unit Title Supply Chain and Operations Strategy

2022
Submission Date 30th September 2022

Declaration of authenticity:
1. I declare that the attached submission is my own original work. No significant part of it has been submitted for
any other assignment and I have acknowledged in my notes and bibliography all written and electronic sources
used.
2. I acknowledge that my assignment will be subject to electronic scrutiny for academic honesty.
3. I understand that failure to meet these guidelines may instigate the centre’s malpractice procedures and risk
failure of the unit and / or qualification.

H.K. De Silva

Learner signature Tutor signature

Date: 30/09/2022 Date:

INTEL CORPORATION ASSIGNMENT COVER SHEET V3.0 | JULY 2019

1
Authored by: H.K.DE SILVA
 Table of Contents

Executive Summery …………………………………………………………… 4

Introduction …………………………………………………………………… 5
1. Understand key operations and supply chain management concepts,
theories and strategies. ………………………………………………… 5
1.1 Concepts and principles of operations and supply chain management..5
1.1.1 Concepts of supply chain management……………………………. 5
1.1.2 Principles of Supply chain management ………………………….. 5
1.1.3 Concepts of operation management ………………………………. 8
1.1.4 Principles of operations management …………………………….. 8
1.2 Key drivers of effective supply chain management…………………… 9
1.3 How effective operations and supply chain management can enhance
competitiveness………………………………………………………….. 11
1.4 Key decisions made by business to improve the supply chain and
operations………………………………………………………………… 12
1.5 Application of different strategic approaches to supply chain and
operations management in organizations ……………………………... 14
1.5.1 Levels of strategies ………………………………………………….. 14
1.5.2 Demand driven strategy ……………………………………………. 14
1.5.3 Cost driven strategy ………………………………………………… 15
1.5.4 Vendor managed inventory ………………………………………… 15
1.5.5 Sand cone model of improvement ………………………………….. 16
2. Understand performance measurement approaches and techniques… 17
2.1 The relevance of performance measurement with Supply chain and
operations management…………………………………………………. 17
2.2 Various financial, non-financial single and multi-factor performance
Measures applicable to organizations …………………………………………… 19
2.2.1 Financial performance measures ……………………………………….. 19
2.2.2 Non-financial performance measures …………………………………… 19
2.2.3 Single and multi-factor performance measures …………………………. 19
2.3 Selection and application of key performance indicators for effective supply
chain and operations management………………………………………… 20
2.4 How Intra and inter-organizational benchmarking can help organizations
Improve the supply chain and operations management efficiency ……………. 21
2.4.1 Internal benchmarking ………………………………………………….. 21
2.4.2 External benchmarking …………………………………………………. 21
Conclusion ………………………………………………………………………… 22
References ………………………………………………………………………… 23

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 Executive Summary

After launching our "Atom" chip on the market, we had to drastically cut supply chain
expenses. For units selling for $100, supply chain expenses of roughly $5.50 per chip
were manageable, but the cost of the new chip was about $20. We had to find a way
to lower the Atom chip's supply chain expenses. The only choice we had was to lower
inventory level in order to lower supply chain costs by reducing the cycle time.

Furthermore, some of the primary methods we employed include the vendor managed
inventory model, external benchmarking, developing an official supply chain & operations
planning system, and other approaches detailed in this study.

By using these strategies and key decisions of supply chain we could achieve the target as
listed below.

 Reducing the chip assembly test window from a five-day to a twice-weekly.

 Reduce the order cycle time for the Atom processor from nine weeks to only two.
 Reduced supply chain costs by more than $4 per unit for the $20 Atom chip.

You may learn more about the process by reading this report.

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 Introduction
This study will help you to understand how supply chain costs are reduced while
developing new, inexpensive "Atom" chips by using performance measuring
methodologies and procedures. It covers both manufacturing and service sectors and
covers a wide range of operations and supply chain management (OSCM) tasks.

1. Understand key operations and supply chain management

concepts, theories and strategies.

1.1Concepts and principles of operations and supply chain

management.

1.1.1 Concepts of supply chain management.

 Planning
 Procurement
 Production
 Distribution
 Client Interface

Making successful long- and short-term supply chain plans is the goal of planning.
The procurement phase of the buying process is concerned with acquiring the
necessary supplies, parts, and products. Production, often known as the manufacturing
process, is the act of turning raw materials into completed items or components for
other products. Supply chain managers assist manufacturing and guarantee that
essential resources are accessible when required. The logistics of moving items along
the supply chain are managed by the move process. All of the concerns associated to
organizing customer contacts, attending to their demands, and flawlessly completing
orders are at the center of the demand process.

1.1.2 Principles of supply chain management.

 Adapt supply chains to customer’s needs

Businesspeople and supply chain experts are both taught to concentrate on the
demands of the client. We separated clients into several categories in order to better
understand them; this process is known as segmentation. The first method of customer
segmentation is ABC analysis (used in inventory management), which divides
consumers into categories depending on their profitability or sales volume.

We first examined the four key variables for each of our clients in order to execute the
ABC analysis: sales revenue, revenue potential, contribution margin, and support
expenses.

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The residents of A will be the most important clients. These clients will generate a
sizable amount of income and account for a sizeable share of the contribution margin.
The residents of Tier 2 will be in B. These clients won't be spending as much as they
might, though. The remaining members of your consumer base are in Category C.
Additionally, it could contain dependable clients who frequently make little
transactions. While these clients will spend money, they won't make a significant
impact on your business's total revenue and profit. These clients often don't have a lot
of promise.

 Customize logistics network.

We needed to modify the various logistical networks to cater to different segments

when we segment a client depending on the service requirements. We already had
many logistical networks for various clients. Each client in the US or EU may already
be in charge of the raw material supplier, request certain manufacturing lines, and
suggest 3pl firms and air/sea carriers. So, designing a logistics network is a type of
effort that is mostly driven by the client.

 Align demand planning across supply chain.

Supply chain professionals are instructed to exchange demand information with

business partners so that no one needs to hold extra inventory. In a very intriguing
paper titled "Top-Down Versus Bottom-Up Demand Forecasts: It was discovered that
using our own historical order data is more accurate than using POS data we obtain
from retailers if we base demand forecast on SKU/Customer level. - Utilizing the POS
data, we receive from retailers is more accurate than using our own historical order
data if we build our demand estimate on the SKU/Store level.

 Differentiate products close to customer.

The main goal of product differentiation is to persuade customers to pick one brand or
product over another in a crowded market of rivals. It finds the characteristics that
distinguish one product from another that are similar and makes use of those
distinctions to influence consumer decision.

 Use strategic outsourcing.

The company's alternate method for completing its value chain tasks is through
strategic outsourcing. There are quite a few businesses that specialize in particular
activities on the market nowadays. By cutting costs or increasing effectiveness by
developing a competitive advantage, outsourcing certain tasks could increase
efficiency.

 IT Support Multilevel Decision-Making Development.

In my view, business process re-engineering must be done before adopting an IT

project, this provides a thorough grasp of any process flaws, allowing us to decide
what sort of technology you actually require.

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  Assume both service and financial metrics.

We employed the costing approach known as Time Driven Activity Based Costing
(TBABC) to assess the profitability of goods and services. The product's price is
calculated by multiplying the sum of the time needed to accomplish each step in the
process. TBABC is a development of the idea of activity-based costing (ABC).

Step 1 Step 2 Step 3

Resource & Computation of Estimation or
activity total cost for each calculation of
identification activity practical capacity

Step 6 Step 5 Step 4

Product or Development & Calculation of
service cost construction of activity units
calculation time equations costs

Figure 1. Time Driven Activity Based Costing.

Anyway, we also practiced service and financial indicators from programs like six
sigma and lean manufacturing as mentioned below.

Lean Focus on waste elimination supports Six sigma quality

Lean Six Sigma

Goal: Improve process Goal: Improve process
performance through waste performance in relation to what
elimination & cycle time is critical to the customer.
reduction. Method: Uses the DMAIC
Method: Impliment lean tools method and quality tools.
such as Kaizen events, value Deployment: Explicit
stream mapping, 5S etc. infranstructure.
Deployment: Implicit
infranstructure
Customer satisfaction
Speed, Flow, Cost

Six sigma quality supports Lean speed

Figure 2. Service and financial indicators.

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 1.1.3 Concepts of operations management.

The three concepts of operations—inputs, transformation procedures, and outputs—

are shown in the Figure below. The systematic direction and control of the processes
that convert resources (inputs) into completed goods or services for consumers or
clients is a component of operations management (outputs).

Inputs Operations Outputs

Capital Inventory Finished goods

Raw Materials Supply chain Packaging
Machinery Capacity strategy Warehouse &
Workers Quality control storage
Process strategy Distribution
Services

Figure 3. Concepts of Operations management.

1.1.4 Principles of Operations management.

In order to assist manufacturing, avoid frequent issues and prosper, we had to adhere
to the following principles.

 Reality
Instead of concentrating on little tactics that contribute to a problem, operations and
management must concentrate on the bigger issue. No one tool can provide a fix for
all problems.
 Humility
Managers must be aware of their constraints and respect them, steering clear of trial
and error at all costs. This saves time and money and, in the long run, is beneficial
overall.
 Organization
All components of a manufacturing process must be predictable and consistent since
everything is interrelated. Without production planning and control that encourage
predictability and consistency, operational management cannot be successful.
 Accountability
Every manager of operations must be responsible. Checks and balances should be in
place for managers to ensure accountability.
 Change
In operational difficulties, change is desirable. For continual operational

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 improvements to be feasible, new solutions must be welcomed. Adopting
contemporary change management techniques like Agile, Six Sigma, Lean, and
Kaizen is beneficial.
 Quality control
Quality controls must be in place during manufacturing activities. The final product's
or service's quality cannot be assured in the absence of quality management. Total
quality management is a comprehensive approach that calls for excellence across a
variety of domains, such as:
• Procurement
• Logistics
• Materials administration
• Warehousing
In order to produce completed items, raw materials must be properly tracked as they
pass through the whole logistics and supply chain.
 Success
Customer satisfaction with the final product or service must be high in order for
operations to be successful. Additionally, they ought to be open to coming for more.
 Know the competition
It's crucial to research rival businesses and comprehend the strategies, target markets,
and competitive advantages in order to maximize operations.
 Causality
Operational issues are preceded by telltale indications. Managers must find the root
causes of issues and fix them in order to simplify processes.
We could set up common metrics and reports that would help identify issues like
bottlenecks and other inefficiencies since we already have an operations management
system, such as an enterprise planning system (ERP), manufacturing execution
system (MES), and material requirements planning system (MRP).
 Consumer collaboration
Finally, managers must have a thorough understanding of their clientele in order to
enhance their goods and services.

1.2 Key drivers of effective supply chain management.

A relevant framework for considering effective supply chain capabilities is provided

by the five drivers. The degree to which a supply chain can combine responsiveness
and efficiency will depend on decisions made about how each driver does business.

 Production.
Production might be spread out across several smaller facilities that are near to
sizable consumer bases, resulting in quicker delivery times. Since efficiency is
desired, we could construct factories with little extra capacity that are designed
for manufacturing a certain range of chips.
 Inventory.
Reducing inventory levels was necessary to improve inventory management,

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 especially for items that don't sell as frequently. Stocking items in a variety of
places helps increase responsiveness by keeping the inventory close to the
clients. Stocking goods at a small number of central locations, such as regional
distribution centers, could result in cost reductions.
 Location.
A corporation setting up many sites near to its consumer base would be a
location choice that stresses responsiveness. Place facilities (factories,
warehouses, and shops) at the desired locations, then specify the storage
capacity and running costs to simulate this selection.
 Transportation.
Pipelines, railroads, and other forms of transportation may all be used
extremely effectively. If transportation originates from a single central hub
facility or distribution hub rather than several scattered branch locations, it
may also be made more efficient. Transporting goods in larger quantities less
frequently emphasized efficiency.
 Information.
Every year, as information collection and sharing technology becomes more
accessible, user-friendly, and affordable, its influence gets greater. Similar to
money, information is a very valuable resource since it can be used right away
to improve the performance of the other four supply chain drivers. When
businesses gather and exchange precise and timely data produced by the
activities of the other four drivers, they may attain high levels of
responsiveness.

These five drivers are showed in the diagram below:

Production Inventory
What, how and How much to
when to produce make, how much
to stock

Information
Basis for
making these
decisions

Transportation Location
How and when to Where best to do
move product What activity

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Figure 4. Key drivers of supply chain management.

1.3How effective operations and supply chain management can

enhance competitiveness.

The methods through which the Operations Management function concentrates on the
attributes of cost, quality, flexibility, and speed are known as competitive priorities
which we also used. The emphasis placed on each of the competitive criteria depends
on the firm's clients.

 Cost
Businesses whose clients place a high value on pricing will be highly interested in
developing procedures that allow them to maintain low prices. So, we devoted great
attention to locating and getting rid of trash in our operations. This caused cut
expenses by lowering faults and improve productivity.

 Quality
Businesses that value quality do so by designing exceptional products and processes.
Manufacturing must guarantee that the procedure can generate the items without any
flaws. The only way a company can guarantee consumers' expectations will be met is
by having outstanding design quality and good process quality.

 Flexibility
Businesses that emphasize flexibility typically select equipment that is
multifunctional and general-purpose. We frequently made an effort to retain a tiny bit
of extra capacity on hand. Employees with a variety of skills who can work in several
departments or with different types of technology are highly prized.

 Delivery (reliability and speed)

We could provide our goods and services as quickly as possible must be highly
effective in doing.

The link between a customer's priority and a company's strategy is summarized in the
table below.

Customer’s priority Firm’s strategy

Cost Reducing product costs and waste while increasing

output
Quality Creating more robust, long-lasting goods while
reducing flaws

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 Flexibility Flexibility in product design and output, utilizing all-
purpose equipment and workers with a variety of
skills
Delivery Maintaining reliable and speedy delivery services

Table 1. Competitiveness comparison.

1.4Key decisions made by business to improve the supply chain

and operations.

Many different sorts of areas that need to be handled may be divided up into
categories of operations strategy. Whether the company plan is implemented will
depend on the decisions taken in these areas. 10 crucial operations management
decisions we engaged are listed below.

 Design of Goods and Services.

The final product's or service's design will have the most influence on the price to
create it and the quality that can be obtained.

 Quality
How the company will make sure that the requirements for the product are satisfied.
This could involve implementing Six Sigma, TQM, or statistical process control.

Control

Improve Define
Six
Sigma

Analyze Measure

Figure 5. Six sigma process.

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Six Sigma is a quality improvement approach that counts the number of flaws in a
process and aims to systematically fix them.

Steps are briefly explained below.

Define - Determine the objectives of the project and each client delivery.
Measure - Recognize the performance right now.
Analyze - Identify the underlying reasons of any flaws.
Improve - Decide how to fix the procedure and get rid of errors.
Control - Future process performance management.

 Process and Capacity Design

The kind of product, coupled with its quantity and diversity, will have a significant
influence on the process type that is selected.

 Location
The success of a company depends on key decisions like how many locations to open
and where to put them. This caused a significant impact on both the speed of the
transformation process and the delivery of goods to customers.

 Layout design & strategy

Consider the location of labor centers, the flow of commodities, people, and
information while planning the layout. How supplies are distributed and utilized.

 Human Resources & job design

Decisions about employee motivation and training are made in the context of human
resources and job design.

 Supply chain decisions

The location of suppliers and the degree of supplier collaboration are key factors that
affect price and delivery time.

 Inventory
How inventory be used and managed inside the company and its supply chain?

 Scheduling
How to arrange production, resources, and personnel in order to be productive,
efficient, and to keep one's promises to consumers is covered by scheduling.

 Maintenance
This include keeping machinery and equipment in good condition, as well as
processes steady and quality high.

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 1.5. Application of different strategic approaches to supply chain
and operations management in organizations.

The organization that transforms raw materials into finished items must proactively
develop a supply chain strategy as the global market gets more complicated.

1.5.1 Levels of strategies.

Corporate level strategy, business level strategy, and functional level strategy are the
three levels of strategies. Business executives may define goals at every level of
strategy, from the highest corporate level to the lowest functional level.

Acquisitions,
Organization disposals,
as whole entering/leaving
Corporate
industries
Strategy
Compete Competitive
successfully advantage, meet
Business needs of key
in individual Strategy
markets customers

HR,
Functional Marketing,
Day to day
Strategy IT operations

Figure 6. Levels of strategies.

The most evident aspect of supply chain management is the operational level. These
are the routine procedures, choices, and plans that are made to maintain the supply
chain's functionality. The strategic methods used to optimize operations and
accomplish organizational objectives are reviewed below.

1.5.2 Demand driven strategy.

A demand-driven supply chain is one tactic supply chain managers may use for their
management system. It is simpler to assess if this supply chain style is a good fit for
the supply chain management efforts because we are aware of the uses and
advantages of it. We collaborated to gather precise demand data and minimized

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information delays. It increased the effectiveness of the operations and kept better
track of the supplies thanks to this.

We chose push method from the push-pull strategy in order to meet the customer
demand.

In anticipation of demand In response to demand

Push Process Pull Process

Typically, procurement, Typically, customer

Manufacturing and order cycle
Replenishment cycles

Push-pull boundary
Customer order arrives

Figure 7. Push-pull method.

Push marketing techniques, such as those listed below, are used to expose consumers
to products:

 Customers are sold directly to by salespeople

 Point-of-Sale signs (POS)
 exhibit promotion

1.5.3 Cost driven strategy.

Cost-driven strategies prioritize cutting expenses wherever they may be. Using low-
cost Value Propositions, significant outsourcing, and maximum automation, this
strategy tries to build and maintain the leanest Cost Structure feasible. By using
outsourcing method, we could achieve the target of reducing cost as described below.

 Professional outsourcing.
When a business engages specialists from a third party to carry out specialized tasks,
this is known as professional outsourcing. Employing professional outsourcing from
Malaysia helped our businesses save a significant sum of money since we simply had
to pay for the services received rather than having to hire a team of experts to perform
the services internally.

 IT Outsourcing
Hiring a technology contractor from outside the organization to plan, manage, and fix
IT services for the company, such as creating custom software and fixing corporate
technology helped to smooth the operation effectively.

1.5.4 Vendor Managed Inventory.

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Vendor Managed Inventory (VMI), is a process of supply chain integration where
providers of a material handle as many components as they can. The key distinction
between VMI and typical inventory management is that with VMI, the buyer (we)
shared the inventory and demand data as well as the delivery criteria with the supplier
instead of deciding on order size alone. The supplier calculates the order size thanks
to our disclosure of this information. As a result, we were in charge of providing the
precise and timely information required for forecasting, and the supplier was in
charge of overseeing the whole supply chain.
Some of the advantages we gained from VMI is listed below.

 Easily readable inventory levels.

 Ordering of stocks is clear.
 Items safely stored in a warehouse keeping an eye on the market.
 Deliveries and shipping.
 Restocking requirements are met.
 Controlling costs.

1.5.5 Sand cone model of improvement

According to the Sand Cone model, there is a hierarchy among the four capacities
even if it is conceivable to trade off one capability against another in the short term.
To develop a cumulative and long-lasting manufacturing capability, management
should first focus on improving quality. Next, while efforts to improve quality are
expanded, attention should be paid to improving the dependability of the production
system. Finally, while all of these efforts are intensified, attention should be paid to
improving production flexibility (or reaction speed). The trade-off hypothesis serves
as the foundation for the majority of traditional management strategies for enhancing
industrial performance.

Cost

Flexibility

Speed

Dependability

Quality

Quality

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 Quality + Dependability
Quality + Dependability + Speed
Quality + Dependability + Speed + Flexibility
Quality + Dependability + Speed + Flexibility + Cost

Figure 8. Scan done model

2. Understand performance measurement approaches and
techniques.

2.1. The relevance of performance measurement with Supply

chain and operations management.

Performance measurement's primary purpose is to give businesses useful data that

will help them better satisfy consumer needs and achieve the strategic goals. In order
to achieve a given level of customer satisfaction, it is crucial to assess how well the
needs of the consumers are satisfied and how effectively resources are employed. The
efficacy and efficiency of organizational structures, procedures, and resources are
assessed using supply chain performance assessment, not only for one business but
for the whole supply chain. It gives some context for comprehending the entire
system, shapes behavior, and offers data on the performance of stakeholders and
supply chain actors. The creation and application of performance measurements is a
crucial management task. The main performance measures of supply chain and
operations management are as listed below.

 Quality – being right

 Speed – being fast
 Dependability – being on time
 Flexibility – being able to change
 Cost – being productive

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 Quality

Cost Flexibility

Supply chain and

operations
measurees
Productivity Dependability

Speed Visibility

Figure 9. Performance measures in supply chain and operations.

In order to evaluate the performance throughout the creation of a new chip, we

employed a balance score card which measures aids in obtaining a more "balanced"
perspective of performance. Additionally, it is clear how important performance
measurement is in operations and supply chain management.

Measurement Strategic Theme Strategic Objectives Strategic Measures

Financial Increased supply Channel cost reduction. Increased cash flow.

chain flexibility Increased profit Reduced channel
margins. inventory.
Revenue growth. Improved fixed
High return on assets asset utilization.

Customer Perception of Customers drive Flexibility and

flexible response product finalization. agility of the supply
of customers Service channel.
individualization. Ability to deliver
Increased product customized
variety. solutions.

Business Postponement Increased Channel finished

Process and value-added Synchronization. goods reduction.
strategies Increased Increased inventory
communication. turns.

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 Fast flow of Processing
inventories. efficiencies and
Multi-purpose utilizations.
facilities. Optimize
transportation.
Warehouse storage
reduction.

Innovation & Increased Increased core Employee survey.

learning material handling competencies. Personal balanced
and processing Motivated workers. scorecard.
capabilities Skilled workers Total supply chain
competency
available.

Table 2. Balance score card.

2.2.Various financial, non-financial, single and multi-factor

performance measures applicable to organizations.

2.2.1 Financial performance measures.

A supply chain has numerous fixed and operating expenses. The ultimate goal is to
increase revenue while minimizing supply chain expenses. Inventories, transportation,
buildings, operations, technology, materials, and labor all result in costs. The
following factors we used to assess supply chain's financial success.

 Cost of raw materials.

 Income from sales.
 Material handling, production, and inventory holding expenses.
 Transport expenses.
 Cost of perishables that have gone bad.
 Credits from suppliers for incomplete or delayed deliveries.
 Cost of consumer-returned items.
 Credits for products that suppliers have received back.

The primary modules of activity-based costing, inventory costing, transportation

costing, and inter-company financial transactions are often used to put up the financial
performance indexes.

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 2.2.2 Non-financial performance measures.

The information on the company's performance in non-monetary or non-money terms

is provided by non-financial performance metrics in the most basic form.

 Consumer satisfaction.
 Speed delivery.
 Customer loyalty.
 Customer acquisition.
 Productivity of internal processes.
 Quality of goods or services.
 Training and development for employees.
 Creation of new products and procedures.

2.2.3 Single and multi-factor performance measures.

Measures used to judge an organization's performance purely, without considering

any other aspects, are known as single-factor performance measures. Multi-factor
performance measures, on the other hand, are those that are used in a single mode
together with other metrics to help assess an organization's performance.

2.3.Selection and application of key performance indicators for

effective supply chain and operations management.

Key performance indicators (KPIs) are a group of numerical measurements that may
be used to assess the success of your company over time. They specifically provide
the ability to keep track of how well the company is accomplishing its intended aims.
Let's examine how these KPIs for supply chain and operations management
performed and how we used them.

 Perfect Order
A composite of multiple significant measures, the Perfect Order KPI provides you
with insight into several aspects of the order fulfillment process. Additionally, it may
assist you in cost management, customer satisfaction research, and the tracking of
storage and delivery operations. On-time delivery, full delivery, and proper
documentation are some of the perfect order KPI's most crucial elements.

The perfect order KPI is measured using the following formula:

Total number of orders – Number of error orders x 100

Total number of orders

 Inventory Days of supply

The number of days your inventory may last between restocking’s is the inventory
days of supply. This supply chain KPI enables you to monitor the stock levels in the

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warehouse, allowing you to quickly restock it before demand spikes or in the event of
a stock-related emergency, protecting the reputation and financial investments.

The Inventory days of supply KPI is measured using the following formula:

Inventory on hand
Average daily usage of inventory

 Inventory Turnover
Another supply chain KPI that sheds light on how frequently your total inventory is
sold over a given period is inventory turnover. You may use inventory turnover to
gauge how well your manufacturing, marketing, and sales operations are working
together to fulfill orders.

The Inventory turnover KPI is measured using the following formula:

Cost of goods sold

(Opening stock – Closing stock) / 2

 Customer order cycle time

The customer order cycle time provides crucial information on the responsiveness of
the supply chain and the service provided to customers. It shows the time span
between when a consumer submits a purchase order and when it is successfully
delivered to the customer.

The Customer order cycle time KPI is measured using the following formula:

Actual delivery date – Purchase order creation date

2.4.How Intra and Inter-organizational benchmarking can help

organizations improve the supply chain and operations
management efficiency.

2.4.1 Internal benchmarking.

Internal benchmarking is all about enhancing your company by evaluating it against

previous information. Internal benchmarking is a method for identifying the best,
most effective processes and disseminating them throughout the business, whether
you're comparing organizational departments or various branch locations.

2.4.2 External benchmarking.

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Setting objectives based on what your rivals are doing is what external benchmarking
is all about. Your company can obtain a competitive edge by researching the
procedures and standards of other companies in order to equal or, preferably, beyond
the industry norm.

The following are some advantages of internal and external benchmarking that
resulted in efficient supply chains and operations of our company

 Determine where to improve by identifying any gaps in performance.

 Create a set of uniform procedures.
 Establish an open culture and support ongoing development.
 Set criteria for performance.
 Monitor company's performance.
 Set goals for business's success.
 Be aware of the target's distance.
 Discover how to create the best Supply Chain.
 Reduce the operating costs of the supply chain.
 Establish a baseline for ongoing improvement.
 Choose the important metrics.

Conclusion

Higher earnings through increased customer satisfaction and decreased operating

costs are the ultimate objective of efficient supply chain management. When costs are
under control and whenever feasible decreased, profits are healthy. When the price of
manufacturing and raw materials decreases, operating costs also decrease.

However, by understanding how to collaborate with the distributors and vendors of

their products to increase operational effectiveness and reduce costs, businesses may
achieve profitable expansion.

Supply chain assessment ensures organizational behavior is under control, protecting

the company from lost sales and subpar long-term growth. Therefore, it is crucial to
put the main tactics for gauging supply chain performance into practice if you want to
keep your business on track.

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References:

Supplychainopz.com. (2010). 7 Principles of Supply Chain Management Explained.

[online] Available at: https://www.supplychainopz.com/2013/07/principles-of-supply-
chain-management.html.
‌
Planet Together (2019). What are the Principles of Operations Management? [online]
Planettogether.com. Available at: https://www.planettogether.com/blog/what-are-the-
principles-of-operations-management.
‌
mhugos (2014). Five Supply Chain Drivers. [online] SCM Globe. Available at:
https://www.scmglobe.com/five-supply-chain-drivers/.
‌
Indeed Career Guide. (n.d.). What Is an Operations Strategy? Definition and Benefits.
[online] Available at:
https://www.indeed.com/career-advice/career-development/operations-strategy.
‌
Schroeder, R.G., Shah, R. and Xiaosong Peng, D. (2011). The cumulative capability
‘sand cone’ model revisited: a new perspective for manufacturing

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strategy. International Journal of Production Research, 49(16), pp.4879–4901.
doi:10.1080/00207543.2010.509116.
‌
Parihar, A. (2021). What is Vendor Managed Inventory? VMI Examples & Benefits.
[online] SelectHub. Available at: https://www.selecthub.com/inventory-
management/vendor-managed-inventory-systems/.
‌
Science Alert. (n.d.). Collaborative Planning Forecasting and Replenishment
Initiatives: A State of Art. [online] Available at: https://scialert.net/fulltext/?
doi=ajie.2010.89.104.
‌
Surbhi S (2017). Difference Between Push and Pull Strategy (with Comparison
Chart) - Key Differences. [online] Key Differences. Available at:
https://keydifferences.com/difference-between-push-and-pull-strategy.html.
‌
Borad, S.B. (2019). Non-financial Performance Measures – Meaning, Importance
and More. [online] eFinanceManagement.com. Available at:
https://efinancemanagement.com/financial-analysis/non-financial-performance-
measures.

Thank You!

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