Using Performance Dashboards in Supply Chain Management
The majority of KPI dashboards are overloaded with metrics.
To get the most out of your SCM intelligence only the most appropriate
metrics used by decision makers are needed. This article provides
an outline of how to best use performance dashboards in Supply Chain
Using dashboards that are carrying large numbers of KPI's does
not deliver information to SCM managers so they can make optimal
decisions. Focusing on the key metrics that identify the main source
of SCM business performance is vital and reducing the number of
metrics used allows managers to understand better and far more intuitively
what a metric is actually trying to tell them.
Avoid Too Much Information
"Less is more" or TMI (Too Much Information) are two
of the comments that you will hear from SCM experts who truly understand
the components of the business supply chain from procurement, processing
and through to customer delivery.
In recent few years, RFID technology that allows tagging of containers,
pallets and individual shipment items provides a mass of raw data
on content, models, color, specification, origination and so on.
It is extremely tempting to dive in and start thinking that all
this data that we are now routinely able to collect and collate
can somehow be manipulated to provide SCM managers with even more
information that will help them make better and more profitable
However, little of this information is helpful to the SCM management
team. By adopting Pareto's Principle and focusing on the 20% of
metrics that are actually telling you how 80% of SCM business performance
is being generated delivers better results.
Key SCM Metrics
Concentrating on the basics provides a far better SCM dashboard
to focus managers on the real drivers of the supply chain process.
This includes: cost reduction, better supplier management, shorter
delivery times or better on-time delivery to customers, improving
the efficiency of the manufacturing chain and being able to distil
this in a format that presents information against pre-set indicators
and historical trend data.
Only include the following KPI on your SCM dashboard:
- Production on Time and Complete
- Supplier Fulfillment on Time and Complete
- Perfect Order Fulfillment
- Perfect Order Lead Time
- Expedited Order Fulfillment
- Customer Return Rate
- Cash to Cash Cycle Time
These are seven KPI's provide the supply chain management team
with insight into 80% of the drivers of SC performance. Any more
information will likely result in data overload, delays in decisions
and confusion over what the metrics are actually trying to tell
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