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Supply Chain Performance Measurement

This document discusses supply chain performance measurement. It begins by defining supply chain and explaining the importance of supply chain performance management in achieving organizational goals, improving competitiveness, better customer care, and increased profitability. It then discusses traditional approaches to measurement, including productivity, quality, customer service, costs, and asset management. Specific metrics are provided for each category. The document also discusses contemporary approaches, noting they must have an analytical framework, process orientation, and linkages. Finally, frameworks for contemporary approaches like the balanced scorecard are discussed.

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Jasdeep Singh Bains
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285 views14 pages

Supply Chain Performance Measurement

This document discusses supply chain performance measurement. It begins by defining supply chain and explaining the importance of supply chain performance management in achieving organizational goals, improving competitiveness, better customer care, and increased profitability. It then discusses traditional approaches to measurement, including productivity, quality, customer service, costs, and asset management. Specific metrics are provided for each category. The document also discusses contemporary approaches, noting they must have an analytical framework, process orientation, and linkages. Finally, frameworks for contemporary approaches like the balanced scorecard are discussed.

Uploaded by

Jasdeep Singh Bains
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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SUPPLY CHAIN PERFORMANCE

MEASUREMENT

SUBMITTED TO : DR. AJAY DOGRA SUBMITTED BY :


VIKUL KAPILA (19039)
SAJAL SINGHAL (19040)
MEANING
• All activities associated with the flow and the
transformation of goods from raw material to
the end user.

• The term supply chain refers to the entire


network of companies that work together to
design , produce ,deliver and service products.
IMPORTANCE OF SUPPLY CHAIN
PERFORMANCE MANANGEMENT

• Achievement of organisational goal.


• Improved competitiveness.
• Better customer care.
• Increased profitability.
TRADITIONAL APPROACH
• Productivity , which is measured as a ratio of output to input.
• Quality, as reflected in adherence to standards , percentage of returns and
rejects damages and so on.
• Customer service parameters such as product availability , reliability ,
time, fill rate.
• Cost Factors, which include total amount spent on each logistical and cross
functional drivers to fulfil customer orders.
• Asset management, which covers the productivity of capital investments
and current assets including inventory and management of current
liabilities.
PRODUCTIVITY MEASURES
• Units shipped per employee
• Units to labour cost
• Equipment downtime
• Capacity utilization
• Order per sales person
• Order entry efficiency
QUALITY MEASURES
• Number of faultless notes invoiced
• Order entry accuracy
• Picking/Shipping accuracy
• Number of customer returns
• Damage Frequency
• No. of credit claims
• Information availability
CUSTOMER SERVICE MEASURES
• Order lead time
• The order entry method
• The customer order path
• Delivery metrics
• Customer service and satisfaction metrics
• The customer query time
• Measuring customer perception of service
COST MEASURES

• Total inventory cost


• Total distribution cost
• Finance and logistic cost
• Asset measure
CONTEMPORARY APPROACH

It must have three capabilities:

• Analytical framework:
I. Explicit statement of supply chain objectives.
II. Identification of key metrics that affect the objectives.
III. List of reports where the metric can be found.
• A process orientation
• Linkages
FRAMEWORKS IN CONTEMPORARY
APPROACH

• BALANCED SCORE CARD


• ACTIVITY BASED MANAGEMENT AND COSTING
• ECONOMIC VALUE ADDED
FINANCIAL BENEFITS
Improved
working
capital &
margins

Revenue
Improved FINANCIAL
profit
cash flows BENEFITS
growth

Higher
return on
assets
CUSTOMER BENEFITS
Improved
value

Improved or
new product CUSTOMER Improved
/ service BENEFITS flexibility
quality

Reduction in
lead time
PERFORMANCE MEASURES
INTERNAL CUSTOMERS
> Waste reduction > Improved Quality
> Time compression >Improved timeline
> Flexible Response > Better flexibility
> Unit cost reduced > Improved value

PERFORMANCE
MEASURES

INNOVATION
FINANCIAL
> Product/service innovation
> Improved WC
> Strategic partnership
> Improved margin
> Information flows
> Improved Cash
THANK YOU

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