Measuring Supply Chain Management Performance

Written by Denisa Călin on February 23, 2010. Posted in Articles, KPI

Supply Chain Management (SCM) is the systemic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al, 2001).

There are more aspects to consider when having a business line in Supply Chain Management, such as distribution strategy and network configuration, logistical and warehousing activities, inventory management and reverse logistics.

When considering specific Supply Chain Management activities and specific performance measures, these can be grouped in different subcategories.  www.smartKPIs.com suggests the following subcategories and specific performance indicators for Supply Chain Management:

Logistics / Distribution:

• # Total warehouse storage space
• # Loading time per vehicle
• % Reverse logistics cost to delivered sales value

Inventory Management:

• % Inventory carrying rate
• % Surplus inventory to total inventory value
• % Obsolete stock value

Procurement / Purchasing:

• % Perfect purchase order rate
• % Purchase spend
• # Purchase orders

Contract Management:

• $ Contract expired value
• $ Contract renewals value uplift
• $ Annualized contract value

Supply Chain Management:

• % Fill rate for ship-from-stock
• # Software used to support supply chain
• % Supply chain related order management cost

To access over 300 Supply Chain, Procurement, Distribution KPI examples visit www.smartKPIs.com

References

• Mentzer, T.J. , (2001), Supply Chain Management,  Sage Publications Inc., London
• smartKPIs.com (2010), “KPI examples for the Supply Chain Management”

Tags: KPI in Practice, Performance Management, Performance Measurement, Supply Chain Performance