12 key performance indicators for the Supply Chain Management

1. KEY PERFORMANCE
INDICATORS OF SUPPLY CHAIN
MANAGEMENT

2. What is a Supply Chain (SC)?
A supply chain is the network of all the individuals,
organizations, resources, activities and technology involved in
the creation and sale of a product, from the delivery of source
materials from the supplier to the manufacturer, through to
its eventual delivery to the end user.

3. What is Supply Chain Management?
In simplest terms, supply chain management (SCM) is all about managing the
supply chain (a network of organizations and the business processes for acquiring
the raw materials, transforming them into finished goods, and distributing the
products to the customers);
The supply chain links many business entities, such as supplier, manufacturer,
transporter, distributor, retailer, and the customers themselves;
The main flows in: product flow, information flow and money flow.

5. THE SUPPLY CHAIN OF APPLE

8. CRITICAL KEY PERFORMANCE INDICATORS
■ Total Delivered Cost
■ Customer Service
■ Supply Variability
■ Demand Variability
■ Operating Costs
■ Performance to Plan
■ Inventory

9. KPI’s for SCM
Perfect Order Measurement: ((total orders - error orders) / total orders) * 100
Cash to Cash Cycle Time: materials payment date - customer order payment date
Customer Order Cycle Time: actual delivery date - purchase order creation date
Fill Rate: (1 - ((total items - shipped items) / total items)) * 100
Supply Chain Cycle Time: sum of the longest lead times for each stage of the cycle
Inventory Days of Supply: inventory on hand / average daily usage

10. Freight bill accuracy: (error-free freight bills / total freight bills) * 100
Freight cost per unit: total freight cost / number of items
Inventory Turnover: cost of goods sold / average inventory
Days Sales Outstanding: (Receivables/Sales) * Days in Period
Average Payment Period for Production Materials: (Materials Payables/Total Cost
of Materials) * Days in Period
On Time Shipping Rate: (Number of On Time Items / Total Items) * 100

11. 3 KPI’s for Measuring SC Performance
For clarity, in measuring supply
chain performance, we should
be focusing on:
■ Inventory
■ Working Capital
■ Time

12. Thank you for your attention!
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