9 Replies Latest reply on Apr 2, 2012 10:03 PM by tua022012

    What's the most important supply chain KPI?

    psmithson@kinaxis.com Apprentice

      From my experiences this topic has never been far from people’s lips but "what’s the most important supply chain KPI?"

       

      My challenge has always been that the most important differs dependent on your perspective

      a)      Managing Assets; Inventory and Ontime Demands

      b)      Demand Life Cycle; Critical Supply and E&O

       

      What ranks at the top for you and your organisation? Do you focus more on operational or financial metrics?

        • Re: What's the most important supply chain KPI?
          williamzelinka Novice

          while the KPI game continues to be played by those that see themselves as skilled in one form of a leading indicator or another, the KPI that counts is end user shelf price

           

          no matter how you many any and all parts of the chain, the end price determines whether the product sells or sits.

           

          famous star branded for centuries sit while Blitzo Soap made in Moldovia sells off of the shelf ...simply because the price is under the branded products

           

          For the last several years and for the next several years to come, the consumer price on the shelf drives and dives markets.  put your key performance indicator on that one number and then start to back up through the chain and re-work your work, nothing else matters.

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          • Re: What's the most important supply chain KPI?
            oseng Novice

            i think KPI's should be situational but some basic ones that are more encompassing and

            reflective than others such as Forecast accuracy in mix. other KPI's such as delivery at various key points of supply chain are also critical. KPI's that are placed at the earlier nodes of the SC would be 'indicative' in final business KPIs.

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            • Re: What's the most important supply chain KPI?
              shyhyong Newbie

              I think the most important is how supply chain fit into company strategy as a whole.

              If the company is solely based on outsourcing to suppliers without any in house capability (e.g. FABless semicon design house), supplier on time delivery, Cycle time, technology, quality and cost may play equally important roles in order to sustain the company competitive advantage (since they solely depend on supplier performance besides internal design capability).

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              • Re: What's the most important supply chain KPI?
                DirkZemke Novice

                Hi,

                 

                I have to say „..it depends on“. But honestly, as you have different supply chains in your company serving different markets and/or customers you also need different KPI’s in line with the different target setting. The targets for your premium products for example for your most innovative products will be different than for your commodity products and with that also the targets and priorities. Assuming that for the innovative products you will set the priority higher on availability and customization and for commodity products more on the supply chain cost optimization. …. Only one thinking.

                 

                 

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                • Re: What's the most important supply chain KPI?
                  psmithson@kinaxis.com Apprentice

                  Thanks for your responses on this topic and based on the views it has been a subject close to many of you. However, there isn't a perfect answer I would also agreed that it's situation dependent. There are many supply chain KPI's but all have different relevance at different points in the process. Ultimately its intent is to show supply chain performance which this differs dependent on circumstance and I still believe there a nominal number of KPI's which provide an overall insight as to its performance.

                    • Re: What's the most important supply chain KPI?
                      DirkZemke Novice

                      Hi Paul,

                       

                      it seems to be we are close to agree “that it depends on” what are the most important KPI’s because this is what you ask for. And yes there are some standard ones and based on the situation and or the company strategy one from these standard ones will become the most important one.

                      So looking to the SCOR model I would vote for the standard important KPI’s: OTD (based on LOTIF calculation), Inventory turns, Supply chain cost, Supply chain flexibility (see SCOR definition); we could argue to out purchasing savings on the list, depending on the definition of Supply Chain function.

                       

                      Greetings

                      Dirk

                    • Re: What's the most important supply chain KPI?
                      prasad Newbie

                      As per my view it depends on industry and enviornment in which the company is but my view is ,operational details should be given importance than finance because financial results depend on how operations has been performed by company..and same applies to creat brand by providing onshelf availability of products which is a challenge for any organization.

                      • Re: What's the most important supply chain KPI?
                        williamzelinka Novice

                        sorry but i have to challenge the merit of the question

                         

                        a kpi is not a cookie cutter set of rules/measures/ at all

                         

                        each one of us in our varied products must develop our own set of kpi logic and not at all look to the net or others for this

                         

                        a quick set of custom kpi's may be all one needs to do business to one's own standard or matching the standard of compeition

                         

                        much like an ERP, design it!  don't think that there is one out there that you can buy and 'adjust' nor use pre-built modules

                         

                        If you own/run any business....then run it your way with your designed processes for your own profit goals

                        • Re: What's the most important supply chain KPI?
                          tua022012 Newbie

                           

                          Thanks for the insight. I look forward to reading more from all of you.

                           

                           

                           

                          Let me introduce you some useful materials: Brand KPIs

                           

                           

                           

                          Best regards