How can you effectively measure supply chain management?

Supply metrics to asses supply are: OTD, On Time Delivery, Order Responsivenes (Formula: Sum Acual Cycle Times of all orders/Total Orders), Reliability (Formula: #Perfect Order/#Total Orders), No increases inside supplier Demand Time Fence shoud be deemed. To really enchance supplyer's collaboration, communication is the key; it will mitigate bullwhip effects and support operations. POS (Point of Sale) or VMI (Vendor Managed Inventory) are ways to increase collaboration over supply side.

My approach to success in supply chain management is not just measuring the results of supply OTIF and KPI, but the analysis of strategic decisions that guided the supply chain. I measure budget vs actual spend, ability to act in critical situations and provide alternative solutions, supply chain reliability in critical conditions and supply chain redundancy, ability to supply unexpected demand, contracts enforcement in times of dispute and ability to resolve disputes.

SCM approach should be customer centric, its not the delivery metrics or how many order you delivered on time its basically how customer was engaded during the course of delivery. SCM is collective of internal and external chain which makes things happen. We need to understand the human approach things can go wrong , order delayed, wrong delivery, defected item these are events can happen because humans are involved when these event happen , it certain one of chain did not perform they it should be which need to be investicated and rectified but how SCM HANDLE customer its most critical part. SCM last mile delivery staff should have CRM understanding and customer should be in Loop when delivery issue is getting resolved

Uma medição efetiva dentro de Supply Chain deve ser feita por meio de KPIs voltados para a área, conforme exemplos abaixo: OTD (nível de entregas no prazo); Pedidos corretos vs pedidos c/ erro; Custo por Pedido; Lead Time de Compras; ROI, etc.; Temos de implementar e acompanhar KPIs que façam sentido para a nossa organização. As métricas de seleção de KPIs devem ser SMART: Específico; Mensurável; Atingível; Relevante; Tempo certo. Os KPIs são medidos mensalmente, mas temos que olhar para suas curvas de tendência e buscar padrões , desvios e previsão de cenário futuro, assim podendo antecipar problemas e solucionar gargalos antes mesmo que sejam um problema.

How are all those things accomplished by managing vendor relationships? Suppose you classify the supply chain companies according to how their impact on business risk and profitability is. In such situation, you'll be in a better position to spot opportunities for expense savings, risk reduction, and value enhancement.

Relashionships are based on Give and takes. How we manage Relashionships in our life same approach get extened into business enviorment. The most important factor to manage relationship is have clear understanding about supplier business process. Continous communication create strong base of relationship, Customer should explain the supplier clear guide lines how they are using vendor product and services. Customer should give opportunity to vendor to explain the business process they have in supply chain so customer can see compatiblity and if found gap then it should be address. The important things when something goes wrong instead of reacting on situation collectively action should be taken to resolve issue.

Performance measurement is as critical as measuring it accurately and appropriately. Metrics like cost, delivery, relationship are measured with a different formulae for different commodities with different weighted average. We should remember following things while creating a framework of measurement: 1. Measure only those parameters which are critical for business 2. Track only those vendors who are critical for business 3. Agree on measurement criteria and performance target with vendors before measuring it 4. Follow industry practice for framework as vendors will fail miserably in something very different. 5. Have both short term, medium term and long term view of the dashboard. 6. Try to automate the process and keep it simple.

One of the top metrics of SCM is availability. Goods should available as and when required with adequate qty. One of the important metrics is measure the no of.incidences you had either insufficient stock or nil stocks and this will identify chronic suppliers and also enable you to prioritise and focus on the top issues for early.resolution.

Effectively measuring supply chain management is a multifaceted task. It spans across various sectors and varies based on the nature of each business. Different business functions within an organization have distinct significance in the supply chain, leading to the need for diverse internal Key Performance Indicators (KPIs). To enhance supply chain management, prioritizing digitalization is crucial. Standardization, while valuable, takes a backseat to the efficient collection of information through digital systems. This approach ensures that data is readily accessible and actionable, enabling organizations to optimize their supply chains effectively.

Feedback metrics This is important for any individual to consider as the supply chain efficiency depends entirely on the customer's satisfaction. no matter how consistent the vendor is but if the quality is not consistent, no matter how low the cost is but if the product integrity is not ensured & no matter how reliable the collab is but if the product is not available the entire journey fails & remains ineffective.

KPI's, SLA's and OKR evaluations are very important in measuring supply chain effectiveness, but at the end I think the question it is also related to perceptions. I would try to get these answers from costumers, employees, managers and other stakeholders: Is supply chain serving the company strategy? Is supply chain doing this in costly effective maner? Is supply chain working to reduce cost and increace effectiveness and eficiency on next years? Our costumers relly on our suply chain?