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Learn performance measures, or "metrics", for global supply chain performance improvements; understand the importance of aligning metrics with your business strategy through insightful examples. Explore service, asset, speed, and financial metrics, along with a special Bullwhip Metric to help you and your supply chain partners mitigate the Bullwhip Effect. Discover "bad" metrics, typically misunderstood or misused to the detriment of supply chain performance.
Prof. Eric Johnson, Tuck School at Dartmouth College
Companies must always be concerned with their competition. Today's marketplace is shifting from individual company performance to supply chain performance: the entire chain's ability to meet end-customer needs through product availability and responsive, on-time delivery. Supply chain performance crosses both functional lines and company boundaries. Functional groups (engineering/R&D, manufacturing, and sales/marketing) are all instrumental in designing, building, and selling products most efficiently for the supply chain, and traditional company boundaries are changing as companies discover new ways of working together to achieve the ultimate supply chain goal: the ability to fill customer orders faster and more efficiently than the competition.
To achieve that goal, you need performance measures, or "metrics", for global supply chain performance improvements. Your performance measures must show not only how well you are providing for your customers (service metrics) but also how you are handling your business (speed, asset/inventory, and financial metrics). Given the cross-functional nature of many supply chain improvements, your metrics must prevent "organizational silo" behavior which can hinder supply chain performance.
This module will help you understand the importance of aligning metrics with your business strategy through insightful examples. You will explore service, asset, speed, and financial metrics, along with a special Bullwhip Metric to help you and your supply chain partners mitigate the Bullwhip Effect (covered in module SCM102). You will also discover "bad" metrics; metrics that are typically misunderstood or misused to the detriment of supply chain performance. Finally, you will see the challenges of attempting to measure the performance of the entire supply chain, along with some possible solutions to overcome those issues.
Objectives
- Align metrics with business strategy and value proposition
- Learn service, asset, and speed metrics
- Learn how to measure the Bullwhip Effect
- Understand "bad" metrics
- Discover the value of chain-wide metrics
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SCM105 Specifications
Rating:
(915 ratings)Total Reading Time: Approx. 1 - 2 hours (for average readers)
Word Count: Approx. 11,000 words
Author: Dr. Warren H. Hausman
Professor of Management Science & Engineering, Stanford University
Certificate: Counts toward Fundamentals of Supply Chain Management
Datasheet: 
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Contents
- Introduction
- Alignment of Metrics with Business Strategy
- Service Metrics - Build-to-Stock
- Service Metrics - Build-to-Stock (continued)
- Service Metrics - Build-to-Order
- Inventory Metrics
- Speed Metrics
- Financial Metrics
- Bullwhip Metric
- "Bad" Metrics
- Applying Metrics Across the Entire Supply Chain
- Conclusions
- Test Your Knowledge
- Feedback