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Your Supply Chain Metrics Must Fulfill 8 Criteria

The reason you should measure supply chain metrics is that they showcase supply chain performance from various angles. Due to its intricate processes, people generally narrow down to the core parameters. To get a better picture, you must work on several of them. In this article at the Balance Small Business, Gary Marion shares the eight criteria that your supply chain metrics should fulfill.

To-Do List for Supply Chain Metrics

Are you setting the supply chain metrics to track specific activities and processes? The majority of the companies establish those that are easy to calculate. However, that is not the purpose of setting a metric. You want to improve at a stable rate, and metrics and KPIs help you achieve that. So, here are eight criteria that your supply chain metrics must fulfill:

Are They Simple Enough for Regular Checks?

The parameters should help display numbers that would give you greater visibility into your supply chain performance. You do not have to calculate complex numbers to get the real picture.

Do They Have Relevant Data?

To have objective answers from the supply chain metrics, feed them with unbiased and structured data. They would help you to work proactively on priorities without being reactive.

Are They Measuring What Matters to the Company?

What matters to your company now might not be a priority for your peers. So, set supply chain metrics that show the progress you have made to fulfill company goals.

Can You Translate Results into Actions?

When a metric turns red, can you take action to improve its results? Establish parameters that you can easily translate into actionable items.

Is the Metric Data Readily Available?

Businesses are changing every day, so establish metrics that do not need much calculation to provide accurate results. The more complicated the process is, the less time you get to accomplish your goals.

Do You Have Time-Specific Parameters?

Supply chain metrics like on-time deliveries, on-time receipts, time to process purchase orders, and time to fulfill an order fall in this category. You can quickly pick up the pace if you are lagging in these areas.

What Are the Cost-Related Metrics?

Regulate your margins and bottom line with cost-related parameters. Supply chain metrics like inventory carrying costs let you know the overall cost of ownership of your products.

Do You Measure Quality?

No matter how much you spend on marketing and sales, it is quality that improve customer retention. Also, focus on delivery time to keep up the score.

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