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Kpis for scm

12 key performance indicators for the Supply Chain Management

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Kpis for scm

  2. 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. 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. 5. CRITICAL KEY PERFORMANCE INDICATORS ■ Total Delivered Cost ■ Customer Service ■ Supply Variability ■ Demand Variability ■ Operating Costs ■ Performance to Plan ■ Inventory
  6. 6. 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
  7. 7. 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
  8. 8. 3 KPI’s for Measuring SC Performance For clarity, in measuring supply chain performance, we should be focusing on: ■ Inventory ■ Working Capital ■ Time
  9. 9. Thank you for your attention!