SUPPLY CHAIN PERFORMANCE

MEASUREMENT

SUBMITTED TO : DR. AJAY DOGRA SUBMITTED BY :

VIKUL KAPILA (19039)
SAJAL SINGHAL (19040)
 MEANING
• All activities associated with the flow and the
transformation of goods from raw material to
the end user.

• The term supply chain refers to the entire

network of companies that work together to
design , produce ,deliver and service products.
 IMPORTANCE OF SUPPLY CHAIN
PERFORMANCE MANANGEMENT

• Achievement of organisational goal.

• Improved competitiveness.
• Better customer care.
• Increased profitability.
 TRADITIONAL APPROACH
• Productivity , which is measured as a ratio of output to input.
• Quality, as reflected in adherence to standards , percentage of returns and
rejects damages and so on.
• Customer service parameters such as product availability , reliability ,
time, fill rate.
• Cost Factors, which include total amount spent on each logistical and cross
functional drivers to fulfil customer orders.
• Asset management, which covers the productivity of capital investments
and current assets including inventory and management of current
liabilities.
 PRODUCTIVITY MEASURES
• Units shipped per employee
• Units to labour cost
• Equipment downtime
• Capacity utilization
• Order per sales person
• Order entry efficiency
 QUALITY MEASURES
• Number of faultless notes invoiced
• Order entry accuracy
• Picking/Shipping accuracy
• Number of customer returns
• Damage Frequency
• No. of credit claims
• Information availability
 CUSTOMER SERVICE MEASURES
• Order lead time
• The order entry method
• The customer order path
• Delivery metrics
• Customer service and satisfaction metrics
• The customer query time
• Measuring customer perception of service
 COST MEASURES

• Total inventory cost

• Total distribution cost
• Finance and logistic cost
• Asset measure
 CONTEMPORARY APPROACH

It must have three capabilities:

• Analytical framework:
I. Explicit statement of supply chain objectives.
II. Identification of key metrics that affect the objectives.
III. List of reports where the metric can be found.
• A process orientation
• Linkages
 FRAMEWORKS IN CONTEMPORARY
APPROACH

• BALANCED SCORE CARD

• ACTIVITY BASED MANAGEMENT AND COSTING
• ECONOMIC VALUE ADDED
FINANCIAL BENEFITS
Improved
working
capital &
margins

Revenue
Improved FINANCIAL
profit
cash flows BENEFITS
growth

Higher
return on
assets
CUSTOMER BENEFITS
Improved
value

Improved or
new product CUSTOMER Improved
/ service BENEFITS flexibility
quality

Reduction in
lead time
PERFORMANCE MEASURES
INTERNAL CUSTOMERS
> Waste reduction > Improved Quality
> Time compression >Improved timeline
> Flexible Response > Better flexibility
> Unit cost reduced > Improved value

PERFORMANCE
MEASURES

INNOVATION
FINANCIAL
> Product/service innovation
> Improved WC
> Strategic partnership
> Improved margin
> Information flows
> Improved Cash
THANK YOU