What are the best KPIs to track SCM efficiency?

The Best KPIs to Track Supply Chain Management Efficiency: 1) Total Cost KPIs * Cost of goods sold 'COGS'. * Total supply chain costs. * Return on investment 'ROI'. * Carrying cost of inventory. 2) Reliability KPIs: * Fill rates. * Perfect order rates. * Delivery quality. * Inventory turn-over rate. * Order status. 3) Adaptability KPIs: * Flexibility of production processes. 4) Asset Efficiency KPIs: * Inventory on hand. * Cash-to-cash cycle time. * Assets turnover rate. * Repair and Maintenance cycle time. 5) SCM Performance KPIs: * Lead time * Order fulfillment rates. * Late orders rate. * Orders accuracy rate. * Inventory to sales ratio.

Fill rates can be measured in two ways: 1. Volume fill rate : Units fulfilled / Units ordered. This measures the efficiency of the supply chain in meeting demand at the unit level. 2. Order fill rate : #Orders fulfilled in-full / Total # of orders received. This KPI focuses on the completeness of the entire order and reflects directly on customer satisfaction. Both metrics are essential in SCM, but they serve slightly different purposes.

Fill rate stands out as a crucial KPI in assessing SCM efficiency. It measures the percentage of customer demand met promptly, reflecting supply chain responsiveness. A high fill rate indicates optimal inventory management and order fulfillment, signifying operational excellence. Regularly monitoring fill rates enables timely adjustments, ensuring customer satisfaction, and overall supply chain effectiveness.

Fill rate is a metric that measures the efficiency of your supply chain. It tells you how well you are meeting customer demand by indicating if you have enough stock to fulfill orders. However, it's important to note that a fill rate of 100% doesn't necessarily mean you have the right amount of stock. It only shows if you are understocked. In certain cases, like perishable goods or airline seats, it's not necessarily bad to have a lower fill rate. In fact, keeping the fill rate below 100% can actually help increase profits in these situations.

A high fill rate is indicative of a responsive and reliable supply chain. It reduces the likelihood of expedited shipping, which is not only costly but can also have a higher carbon footprint. Sustainable practices emphasize the importance of meeting customer demand efficiently to minimize disruptions.

The Fill Rate tops my list for SCM KPIs. We must track and measure KPIs that are “customer-facing.” This does not discredit the need to measure KPIs such as cash-to-cash cycle time or inventory turnover. Another important KPI is Gross Margin, which measures production and business efficiencies directly. Gross margins are crucial to developing pricing strategies and setting the selling price of products.

El tiempo de ciclo es de mis indicadores favoritos en Supply Chain. Por ejemplo, en compras, el tiempo de ciclo lo implementar para: Tiempo desde Requerimiento hasta conversión de OC, Lead Time del proveedor. En Transporte y Distribución es el tiempo para entrega de pedidos por zona geográfica o canal de distribución. En Planeación lo tomaría como tiempo desde liberación de Orden de Producción hasta entrega de Producto terminado Liberado y en Almacen. En Comercio Exterior lo mediría como tiempo o lead time de importación y exportación. En Customer Service sería como tiempo de atención de orden del cliente.

He utilizado con éxito el Tiempo de Ciclo y creo que es el indicador que más rápido te permite generar eficiencia y ahorros. En Comercio Exterior por ejemplo, puedes medir el tiempo de una importación, el tiempo de planificación de compra, el tiempo de liberación de una carga desde el puerto, el tiempo de revisión del stock en el centro de distribución, el tiempo de ingreso a stock, tiempo de distribución, tiempo de re-stock. En compras, puedes medir el tiempo de requerimiento (desde la requisición hasta la orden de compra), Lead time del proveedor, tiempo de pago, etc.

Cycle time is critical to every company and sincerely to any industry. The ability to measure your productivity cycle time, coupled by the number of movements performed internally and externally, will give you the ability to search for technological improvements. To identify and strive for accurate balance between technological advances and human involvement is of paramount importance to have a streamline production line and effortless path to delivery to customer.

Cycle time is indeed a crucial strategic metric in supply chain management, reflecting the efficiency and agility of operations. It encompasses a variety of underlying KPIs such as order processing time, manufacturing lead time, order fulfillment efficiency, and transportation time. Optimizing cycle time typically leads to improvements in customer satisfaction, inventory turnover, time to market, and overall competitiveness in the market. By focusing on enhancing cycle time, organizations can streamline their operations and achieve better performance across various aspects of the supply chain.

O tempo de ciclo é o período que um produto leva para ir do ponto de origem até o ponto de consumo na cadeia de suprimentos. Ele avalia a rapidez e eficiência da cadeia em entregar valor ao cliente e responder às mudan?as do mercado. Um tempo de ciclo baixo indica agilidade e eficiência, enquanto um tempo de ciclo alto sugere lentid?o e desperdício. Para calcular, subtrai-se o tempo de coloca??o do pedido do momento da entrega.

The cash-to-cash cycle quantifies the duration it takes for a company to transform cash outflows into cash inflows, gauging working capital and cash flow management in the supply chain. A short cycle indicates quick investment recovery and cash generation, while a prolonged cycle implies significant funds tied up in inventory, accounts receivable, and accounts payable. To calculate, sum the days of inventory outstanding and the days of sales outstanding, then subtract the days of payables outstanding. This metric is pivotal for assessing a company's efficiency in cash conversion and working capital utilization in the supply chain.

The cash-to-cash cycle time is a measure of the time lag between the outlay of cash and its recovery through sales. It's a crucial financial KPI that many of our GSCC members track to gauge the liquidity and efficiency of their supply chain. Reducing this cycle means quicker recovery of cash, improving the overall financial health. Strategies like optimizing inventory levels and improving payment terms with suppliers can effectively reduce the cash-to-cash cycle.

Unlocking the full potential of a supply chain involves mastering not only the movement of goods but also the management of cash flow. The Cash-to-Cash Cycle, measuring the time it takes for a company to convert cash outflows into inflows, is a crucial financial KPI. A shorter cycle indicates efficient working capital management, quick investment recovery, and enhanced cash generation. Conversely, a prolonged cycle suggests significant funds tied up in inventory, accounts receivable, and accounts payable. Calculate it by adding days of inventory outstanding and days of sales outstanding, then subtracting days of payables outstanding.

The Cash Conversion, or Cash-To-Cash Cycle (CCC) measures the time it takes for a company to pay suppliers and collect cash from customers. CCC is calculated by adding Days Inventory Outstanding and Days Sales Outstanding, and subtracting Days Payable Outstanding. A lower or negative CCC is ideal, as it means the company is funded by suppliers. CCC is closely linked to Operating Working Capital (OWC), which includes Minimum Cash, Accounts Receivables, Inventory, and Accounts Payable. However, CCC also considers Gross Profit (as part of cash collected) and does not factor in Minimum Cash.

A shorter cash-to-cash cycle is desirable as it signifies efficient cash flow management. This efficiency is linked to sustainable practices by reducing the financial and environmental costs of holding excess inventory and tying up resources for extended periods.

1. Order Accuracy: Measures the percentage of orders delivered correctly, reflecting precision in fulfillment. 2. On-Time Delivery: Tracks the percentage of orders delivered within the promised timeframe. 3. Inventory Turnover: Indicates how often inventory is sold and replaced, highlighting inventory management efficiency. 4. Fill Rate: Shows the percentage of customer demand met without backorders, reflecting service level effectiveness. 5. Cycle Time: Measures the time taken from order receipt to delivery, assessing process speed. 6. Cost per Order: Tracks the total supply chain cost per order, evaluating cost efficiency. 7. Supply Chain Cycle Time: Total time it takes for a product to move through the supply chain from start to finish.

SCM KPI to be aligned to Company goals , and key trackers of KPI for the effective SCM , can be as below 1.Committed Delivery Time vs Actual 2. Cost Effective Saving 3.Process Excellence n Improvisation 4.New Initiatives taken On 5.Market Intelligence n Forcasting 6.Risk Mitigation n Business Continuity 7.Optimum Inventory Mngt other views can be added on

In low-demand, high-supply scenarios, Return on Assets (ROA) is critical as it assesses how efficiently a company utilizes its assets to generate profits under challenging market conditions. A high ROA indicates effective asset use, crucial when sales drop and competition intensifies. It guides strategic decisions, like cost optimization and resource allocation, to maintain profitability. ROA also signals to investors the company's capability to navigate tough markets, enhancing investor confidence. By identifying which assets yield the best returns, ROA informs resource distribution, helping companies manage limited investments wisely

Return on assets (ROA) assesses how effectively assets are utilized to generate profits. In SCM, it reflects the efficiency of resource allocation and operational performance in delivering value to customers while maximizing returns on investment.

The best KPIs for tracking SCM efficiency include Order Accuracy Rate, Inventory Turnover, Lead Time, and Supply Chain Cost. 1) Order Accuracy Rate measures the percentage of correctly fulfilled orders, indicating process precision. 2) Inventory Turnover assesses how quickly inventory is sold and replaced, reflecting inventory management effectiveness. 3) Lead Time tracks the duration from order placement to delivery, highlighting responsiveness. 4) Supply Chain Cost, encompassing procurement, production, and logistics expenses, reveals overall cost efficiently. Together, these KPIs provide a comprehensive view of supply chain performance, identifying areas for improvement and driving operational excellence.