Supply Chain Management Key Performance Indicators
When performing supply chain management at times it can be one of the most difficult areas in an organization. The reason being is because as a supply chain manager you are overviewing so many different areas. While at the same time trying to help in creating a quality product and ensure it gets to customer in one piece.
Additionally as a supply chain manager you have to build relationship and make deals with suppliers, getting and sorting materials, managing finances, maintain operational efficiency within the different processes so they can perform smoothly etc.
To help ease off the pressure as a supply chain manager it would be great to use key performance indicators.
Key performance indicators will help you to set goals and objectives. Then track certain operation and processes. That will you in ensuring that they are all working up to expectations so the goals are met.
Another benefit of why key performance indicators are necessary is that it helps you to be more organized. The reason being is because you will position yourself and have a certain mindset to achieve that goal at all costs. So usually overtime your attitude will change for the better and help you to become a better manager.
Furthermore setting key performance indicators will help your operations to perform more efficient which will help you to cut cost. The reason being is because normally inefficient operations tend to be more costly and will be a burden to your other processes.
Below you can see a set of key performance indicators you can set in your organization’s supply chain management area:
Reduce the number of stock wastage due to expiration or damage in 12 months
Increase the number of products that undergo quality testing in 6 months
Reduce our inventory holding cost by 15% in 12 months
Increase our on-time delivery rate by 10% in 6 months
decrease the number of our fixed order cost in 10 months
Increase our inventory accuracy rate by 8% in 12 months
Reduce our warehouse order processing time by 5% in 12 months
Decrease our inventory turnover rate by 10%
Reduce the time for our customer clearance cycle by at least 5 minutes in 7 months
Increase the rate units moved per person hour by 3% in 9 months
Reduce the impact of our product damaged in our warehouses
Reduce our warehouse accident rate by at least 5% in 10 months
Decrease the rate of our vehicle turn-around time by 7%
Decrease the rate of our average vehicle loading and un-loading time by 10% in 12 months
Try and reduce our number of emergency orders by at least 6% in 9 months
Increase the rate our total numbers of orders fulfilled by 7% in 10 months
Above are just some examples of what kind of key performance indicators you can set to improve efficiency in your supply chain’s management.
Keep in mind that when it comes onto key performance indicators they all vary. So you can modify the examples above or get inspiration from them to fit your organization’s goals and objectives.
Overall key performance indicators can be quite useful and it’s necessary as a supply chain manager to take advantage of this tool.