6 Ways to Measure Supply Chain Management KPIs

Measuring KPI’s for Effective Supply Chain Management?

In every industry, measuring key performance indicators (KPIs) helps maintain standards of excellence and helps you make short-term and long-term decisions for your business. In supply chain management, it’s important to know what to measure to effectively implement KPIs.

KPI Benefits 

The benefits of tracking and measuring your operations with supply chain analytics include:

• Increase efficiency: Pinpoint stumbling blocks and how to remove them
• Maximize labor resources: Track productivity and compare your teams
• Quickly identify errors: Fix little problems before they become big ones
• Meet customer demand: Know where you can make adjustments that keep costs in line while meeting customer expectations for speed and accuracy.

KPIs Today and Tomorrow

Since the supply chain industry is always evolving, keep in mind that the KPIs you decide to measure today will most likely change in the future. In other words, being prepared for what comes next is just as important as knowing what’s happening today.

Short-Term and Long-Term KPIs

It’s beneficial to measure both short-term and long-term KPIs.  Long-term helps you understand the trends so that you’re not making drastic changes to your operations on account of a few bad days. Knowing your short-term analytics via real-time data informs the smaller adjustments you should make on a case-by-case basis.

What to Measure

A supply chain analytics solution should provide an enterprise-level view of warehouse operations, empowering your team with timely, meaningful information that drives process improvements. This should include a set of industry-standard, best-practice KPIs for your operations. To maximize your investment, your supply chain intelligence software should include tools that allow you to create metrics based on your company and its own way of doing business.

Let’s first look at the foundation of metrics you may consider as a starting point. Metrics should generally fall under dashboards that address a specific area of your organization, such as inbound or outbound operations. In some instances, the dashboards have drill-down capabilities where a more granular layer of information is presented.

Any software provider should offer, at a minimum, the foundation for best practice analytics. Compare these to what you’re already tracking, and consider which ones to add or remove.

6 Key Supply Chain Analytics Measurements

1. Inbound

a. Dock-to-Stock
b. Percentage of Supplier Orders Received Damage-Free
c. Orders (POs) and Lines Received per Hour
d. Suppliers On Time

2. Outbound

a. Line Fill Rate
b. Order Fill Rate
c. Fill Rate Percent
d. Lines Picked and Shipped per Hour
e. Orders Picked and Shipped per Hour
f. On Time and Ready to Ship

3. Order Accuracy

a. Order Pick Accuracy
b. Order Pick Accuracy by Type
c. Orders Shipped Complete
d. Cases Shipped vs. Cases Ordered

4. Customer

a. Percent of SKUs In Stock
b. Cycle Time Percent (Internal versus External)
c. Back Order Percent
d. On-Time Shipments

5. Quality

a. Percent Unsaleable
b. Inventory Count Accuracy
c. Inventory Shrinkage by Month
d. Inventory Shrinkage by Type

6. Capacity and Utilization

a. Honeycomb Percent
b. Days on Hand by Inventory Type
c. Days on Hand by Item
d. Percent Capacity Used by Storage Device
e. Shelf Capacity Used by Inventory Type

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Posted by iCepts Technology Group, Inc. A Supply Chain Management Technology Solution Partner

About iCepts Technology Group, Inc. Middletown, PA

We are an Accellos and Microsoft Dynamics NAV Partner offering implementation, service, and support for Accellos One Warehouse Management Systems and Microsoft Dynamics NAV in: PA, DC, DE, MD, NC, NJ, NY, OH, VA, WV, and the entire Mid-Atlantic Region. We also offer cloud warehouse management systems consulting, implementation, service, and support for Accellos One Warehouse Management Systems in: PA, DC, DE, MD, NC, NJ, NY, OH, VA, WV, and the entire Mid-Atlantic Region.

As experienced SCM, WMS and ERP consultants and value-added resellers (VARs), we provide start to finish services for the solutions we represent Microsoft Dynamics NAV for Distribution and Manufacturing, Accellos Warehouse Management System (WMS), Server virtualization, open source VOIP phone systems and infrastructure and security. We provide services that cover process analysis, implementation, training, security and networking. Naturally, we also provide full ongoing support for years after implementation to help our clients succeed. We are your one-stop shop for your business technology needs.

Phone: 717.704.1000

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Another version of this blog was posted on iCepts blog by Greg Miles on April 18, 2018 - 6 Key Supply Chain Analytics Measurements