Measurement is a critical driver of the decisions that impact supply chain performance. Effective, high-performance supply chains typically possess the following qualities:
- Metrics are aligned with the overall company strategy and cascade down through the organization so that all levels are synchronized.
- Measures are balanced across multiple perspectives (e.g., financial, customer, business process and innovation/learning).
- Measures are few in number and evolve over time to ensure focus and alignment.
- Measures are used to reward performance, not to punish.
Key Performance Indicators (KPIs) allow companies to understand their position, strengths and areas for improvement. In the end, KPIs facilitate continuous improvement by focusing on a set of clear, tightly integrated goals and objectives. Our service offerings, which include assessments/diagnostics, benchmarking and KPI analysis and design, reflect this approach.
The first step in any improvement effort is to identify opportunities and determine which ones are worth pursuing. The Assessments/Diagnostics phase constitutes a detailed, analytical approach to identifying, quantifying and developing a plan to prioritize and achieve your supply chain opportunities.
KPI Analysis and Design
KPI Analysis and Design are at the heart of a world-class performance measurement system and, within the context of the supply chain, provide the necessary linkage back to the overall corporate strategy. Develop and implement supply chain KPIs that are properly designed and embody these characteristics:
- Linked to top-level strategy
- Aligned at all levels and controllable
- Easy to understand and measure
- Robust against system gaming
- Lead to performance improvement
- Reflect balance across organizational objectives