Measuring performance in supply chain networks andreas seiler salford business school university of salford, salford, uk submitted in partial fulfilment of the requirements of the degree of. Role of information technology in supply chain management vishal vikramsinha jadhav 1 1m. Performance metrics in supply chain management article pdf available in journal of the operational research society 005. Jul 27, 2016 supply chain management lies at the heart of most businesses that sell goods to customers. The objective of this document is define a bench marking framework capable of. On the other hand, the supply chain for victorias secrets basic items is driven by factors like asset utilization and supply chain efficiency. 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 chain and potentially even the competitive strategy. Sap businessobjects supply chain performance management, one of the sap businessobjects enterprise performance management epm solutions, provides endtoend. Supply chain performance measurement in the manufacturing. Dec 12, 2017 theres a variety of metrics available when assessing supply chain performance metrics and each provide a different perspective of the piece of the supply chain it measures. Supply chain performance measures stanford graduate school of. Further reproduction prohibited without permission. Measuring performance in supply chain networks andreas seiler salford business school university of salford, salford, uk submitted in partial fulfilment of the requirements of the degree of doctor of philosophy, july 2016.
The influence of supply chain management practices in the. Abstract information technology revolution changed the world and all aspects of business processes. Supply chain performance management overview enterprise. Browse metrics and supply chain performance content selected by the supply chain brief community. Todays business climate requires supply chains to be proactive rather than reactive, which demands a new approach that incorporates data mining predictive analytics. As logistic managers need sufficient information and visibility not only. The strategic dimension of supply chains makes it paramount that their. May 05, 2016 a minimal set of metrics that is adapted to a supply chain might include. Inventory metrics, because of the significant impact. Performance management in supply chain management western.
The complete guide to supply chain metrics supply chain brain. Changing your perspective to measure supply chain performance. Supply chain performance measurement and financial analysis. Supply chain performance refers to the extended supply chains activities in meeting endcustomer requirements, including product availability, ontime delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner.
Supply chain performance measurement requires specific metrics which. Performance measurement framework for engineering supply chain one of the primary concern on the supply chain management scm is the performance measurement because it is. Apr 14, 2000 supply chains performance in the context of assessing the success of initiatives aimed at achieving strategic objectives. Many supply chain management decisions continue to be made as though driving with the rear view. Each supply chain performance metric gives a slightly different view of a piece of the supply chain. Supply chain management, as a practice in commercial operations, is now thirty years old. Request pdf performance measures and metrics in a supply chain environment in todays world, supply chain management scm is a key strategic factor for increasing organizational. Number 4, volume x, december 2015 jancik, rathousky. Understanding of metrics used for supply chain management 29 state of the art benefits from supply chain management should be achieved only in the case when. Leonczuk 2016 sc performance is the ability of the entire supply chain to meet endcustomer needs, associated with ensuring the availability of product, deliver it on time in the right way and. Li ebusiness division, management school, university of liverpool, uk abstract esupply chain management in a manufacturing context, is a series of internetenabled value. Many companies use supply chain performance metrics that are easy to calculate but may not necessarily give a true indication of how the supply chain is performing.
When selecting a performance metric to use, a company should examine different characteristics that align with their business. The effective supply chain makes a difference in winning a war, saving a patient, and driving commerce. Performance management in supply chain and operations. Then it summarizes how economic theory treats multiple performance. Performance measures and metrics in a supply chain. As called out by dod supply chain materiel management procedures in dod manual 4140. Proactive supply chain performance management with.
Pdf performance measurement of supply chain management. 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. The types of measures that companies should use and their advantages and drawbacks are provided, alongside useful information on implementing a supply chain performance measurement system. Time, speed and flexibility metrics to measure how fast the supply chain responds to events. Supply chain performance measure can be defined as an approach to judge the performance of supply chain system. Supply chain management scm has received a remarkable attention.
Therefore supply chain performance measurement will be defined and restrained to other concepts such as supply chain controlling and monitoring. Jan 24, 2011 toggle navigation menu poole college of management supply chain resource cooperative. Proper alignment with the business strategy is essential to ensure strong overall perfor mance. With substantial resources dollars and people being applied towards implementing various supply chain programs, users should measure performance to insure desired change happens.
The types of measures that companies should use and their advantages and drawbacks are. The metrics are categorized for each stage of the supply chain with definition provided at the back of the document. These costs include a number of nonvalue added activities such as service costs, receiving costs, quality costs inspection, rework, reject costs, failure costs, and administrative costs. Theres a variety of metrics available when assessing supply chain performance metrics and each provide a different perspective of the piece of the supply chain it measures. Performance management and its application to specific functional areas like supply chain management scm can therefore be seen as a key driver in the institutionalisation of good governance practices within the public sector. Many supply chain management decisions continue to be made as though driving with the rearview mirror.
All 17 key metrics for supply chain management that you ever. We have collected the most important supply chain metrics for you. Performance measures and metrics in logistics and supply chain. Performance metrics in supply chain management jpc kleijnen and mt smits tilburg university uvt, tilburg, the netherlands this survey paper starts with a critical analysis of various performance metrics for supply chain management scm, used by a specific manufacturing company. Service metrics for measuring how well customer needs are met. Every company today runs on data the key to using your data is choosing the right metrics for visibility into your supply chain. This is usually compared as a percentage over the original order.
Metrics and supply chain performance supply chain brief. Scm has been associated with a variety of advantages including increased customer value, increased profitability, reduced. At best buy, we partner with approximately 160 factories. Improve supply chain visibility using the tradecloud b2b platform.
Managing all the moving parts in your supply chain can be a logistical nightmare without the right kpis and metrics. The strategic dimension of supply chains makes it paramount that their performances are measured. Empirical study of measuring supply chain performance dr. In todays performance evaluation processes, companies tend to refer to several models that will.
Supply chain performance measures are critical for maximising value in the supply chain and maintaining oversight. Tech project management student, veermata jijabai technological institute, matunga, mumbai. How they are managed greatly affects an organizations competitiveness and. Measuring supply chain performance through kpi identification. Improving supply chain performance has become one of the critical issues for gaining competitive advantages for companies.
Performance management in supply chain and operations deloitte. There are hundreds of metrics that can be used to score supply chain management performance. Supply chain metrics that matter makes this truth clear enough with its thorough analysis of recent multiindustry performance trends. Tracking supply chain cycle time identifies existing or potential problems, so your business can take corrective action. Supply chain metrics may include measurements for procurement, production, transportation, inventory, warehousing, material handling, packaging and customer service. Many companies use supply chain performance metrics that are easy to calculate. Commonly used by supply chain management, metrics can help. Many companies use supply chain performance metrics that are easy to calculate but may not necessarily give a true.
In fact, customers are a little sharpereyed than one might assume. Measuring supply chain performance through kpi identification and evaluation niclas gamme, martin johansson department of technology management and economics chalmers university of. Key performance measures for supply chain management from the colombian shipyard wilson adarme jaimes1 1 industrial engineering, production specialist, msc industrial. Proactive supply chain performance management with predictive. In our plotting of industry results for the supply chain metrics that matter report s, we could see that certain. 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. A minimal set of metrics that is adapted to a supply chain might include. Measuring and managing performance in supply chain and. Supply chain performance management provides key metrics for. Supply chain performance measures are often referred to in research and by.
Chapter 5 supply chain performance measurement and. This was the beginning of my journey from manufacturing to understanding larger supply chain concepts. Learning objectives after reading this chapter, you should be able to do the following. Terrance l pohlen international journal of logistics management. Understanding of metrics used for supply chain management 29 state of the art benefits from supply chain management should be achieved. In todays economy the battlefield is shifting from individual company performance to what we call supply chain performance. Supply chain sustainability program en32, hr46, hr910 through our supply chain sustainability scs program, we seek to control risk, enhance the partnership with. Quantitative metrics are the key performance metrics of the supply chain and span endtoend supply chain functions across plan. Supply chain management creates value for companies, customers and stakeholders interacting throughout a supply chain. Balancing these demands to deliver optimal value to the wider organization is a fundamental challenge facing sc. Supplier performance metrics for every organisation.
Modern supply chain execution systems warehouse, labor, and transportation produce a. Performance by operational area metrics for effective supply chain execution now well look at specific examples of some of the more common and effective metrics used in warehousing and distribution to give you a good head start on developing your own. It is widely acknowledged that there has been relatively little interest in developing measurement systems and metrics for evaluating supply. Tech project management student, veermata jijabai technological institute, matunga, mumbai, maharashtra, india. 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. How they are managed greatly affects an organizations competitiveness and profitability. For example, customer satisfaction and product quality. 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. The lack of a widely accepted definition for supply chain management and the complexity associated with overlapping supply chains make the development of supply chain metrics difficult. This paper proposes a framework using a systematic approach to improving the iterative key performance indicators kpis accomplishment in a supply chain context. Performance measurement of supply chain management. Balancing these demands to deliver optimal value to the wider organization is a fundamental challenge facing sc leaders.
Introduction since the term supply chain management was introduced, there has been a great deal of confusion about what it actually involves. Supply chain management series november 46, 2015 atlanta, ga measuring and managing performance in supply chain and logistics operations paula ferguson lecturer, georgia tech supply. In this post, youll find some suggested metrics for supplier performance evaluation and management. Metrics play a key role in the profitable management of a warehouse and in an organizations overall supply chain success. Supply chain performance measurement system based on. In summary, proven approaches to supply chain performance management need to be rethought to cope with. Performance measures and metrics are essential for effectively managing logistics operations, particularly in a competitive global economy.
This helps managers to evaluate scm performance in a muchbalanced way from all angles of business. Supply chain performance measures can broadly be classified into two categories. Key performance measures for supply chain management from the colombian shipyard wilson adarme jaimes1 1 industrial engineering, production specialist, msc industrial engineering. Li ebusiness division, management school, university of liverpool, uk abstract e supply chain management in a manufacturing context, is a series of internetenabled valueadding activities to guarantee products created by a manufacturing process can eventually meet customer requirements and realize returns on. Review and classification nedaa agami, mohamed saleh and mohamed rasmy operations research department, faculty of computers and. Pwcs performance measurement group supply chain benchmark. The ability of a manufacturer to meet additional demand requirements.
Corporate performance is not a set it and forget it proposition. Supply chain performance measurement system based on scorecards and web portals nenad stefanovic and dusan stefanovic faculty of science, university of kragujevac, radoja domanovica 12. As a result, basic goods are manufactured in vertically. Measuring supply chain performance through kpi identification and evaluation niclas gamme, martin johansson department of technology management and economics chalmers university of technology abstract supply chain management has become one of the most discussed topics in business. Every ceo must always be concerned with the competition. This project offers a set of metrics that provide supply chain managers with a forwardlooking. Supply chain measurements or metrics such as inventory turns, cycle time, dpmo and fill rate are used to track supply chain performance. The key elements of supply chain management supply chains comprise the flow of products, information, and money. Manufacturing is the foundation of my interest in supply chain management. You need to track the status of shipments, monitor your inventory to sales ratio, and know which items are currently out of stock.
Inventory metrics, because of the significant impact inventory often has on performance. Defined as the management of the flow of goods and services, it includes the movement and storage of raw materials, work in process inventory and finished goods from point of origin to point of consumption. The balanced scorecard developed in this paper provides a useful guid ance for the practical managers in evaluation and measuring of scm in a balanced way. Supply chain performance open universiteit nederland 1. The important decision for any company is to prioritize which supply chain metrics are important and how they will be used. Commonly used by supply chain management, metrics can help you to understand how your company is operating over a given period of time. Study of performance measurement practices in supply chain.