The need of a flexible, efficient, effective and integrated Supply Chain became a critical point of improvement for almost all Industry sector and markets.
More than ever, measuring results is important to drive your business in the right direction; question is: what is the right direction?
Supply chain has an important impact on costs, so the immediate answer would be related to cost reduction, as a direct benefit for a Company. But Supply Chain can create value added beyond the mere objective of cost saving, building a Company image of excellence among other market players.
KPIs (Key Performance Indicators) are fundamental metrics useful to track your Company’s objectives; modern ERPs are providing tons of data that need to be combined in the right way to produce as a result, a tailored KPI dashboard to help the decision-making.
Each Company is different, and so each Supply Chain service needs the right set of information, to produce the right KPI to help Management to take appropriate actions to improve.
The perfect recipe doesn’t exist: mixing the right ingredients in the right quantity and quality, you will obtain the perfect cocktail.
Here’s a summary of the most important and useful KPIs used in Supply Chain and that we actually measure within HORIX AEROSPACE; we use to divide the KPIs in areas of application, in order to better detail and direct our actions for improvement:
1. RELIABILITY AND RESPONSIVENESS
Perfect Order FulfillmentB.
Order to Delivery Lead Time
2. SOURCING PERFORMANCE
Average purchase price per product
Supplier average Lead Time
Perfect Order Fulfillment (Supplier)
3. TRANSPORT
Average Inbound Transportation Costs per Country
Average Outbound Transportation Costs per Country
Average Actual Invoice Discount per Carrier vs Contract
4. PRICING
Average Profit Margin
Average Fixed Costs/Order
As mentioned, application and identification of the right set of KPIs is not an exact science, it needs tutoring or counseling most of the time, but also in this case, as in all your parts need, we are here to help you decide.
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