April 1, 2013
The area that I believe that is important to any supply chain that will provide success in customer satisfaction is measuring performance. Setting up the appropriate metrics to measure the effectiveness of the supply chain will highlight areas needing improvement to meet the customers’ requirements. Metrics in the supply chain areas will certify an effective and efficient supply chain and room for improvements.
With the market changing and competition increasing at such a fast pace it is imperative to have metrics set up to gain competitive advantage. Setting up appropriate metrics that align with the strategic plan will verify effectiveness of the supply chain or validate that improvements need to be made. These metrics can measure how the supply chain is functioning in ...view middle of the document...
There is more to knowing the profitability like scorecards and other supply chain measuring applications are implemented to control company service delivery. With this system the ability to measure performance of the warehouse and delivery points, manufacturing, customer satisfaction which must be looked at from the financial and marketing perspectives (Miller, 2008).
The most frequently used measurements are customer required cycle time, takt times, transit time, on time delivery, freight costs, claims percentage, monthly inventory and supply, and defects per million prospects. Selecting just a few areas to measure is not efficient every aspect of the supply chain must have some type of metric to get the whole picture. Customer service, transportation, inventory, warehousing, distribution, productions, and procurement all must be producing good results to have the most effective supply chain. The managers must identify the most appropriate metrics to use and apply given metrics. One has to be careful because not all of the metrics are helpful or show the performance of all the areas. Making careful decisions and setting realistic goals is where this process will start (Miller, 2008).
Managers need to choose gages that will keep track of supply chain optimization, gages that detect challenging areas and can compare through industry benchmarking. Customizing the metrics will help to narrow down areas with the most issues. Metrics are not the solutions to problems but a way to see them and problem solve for a solution. It is how managers look at and interpret the information that will help rational and effective decisions. The goals of the metrics should be specific, measurable, achievable, practical, and time-bound (Miller, 2008). The use of metrics will make the company more profitable, the supply chain more efficient, and most important better customer satisfaction.
Miller, S. (2008, June 17). How to Come Up With Effective Supply Chain Metrics. Retrieved from http://EzineArticles.com/1254910