Performance Measures for Supply Chain Management

Performance Measures for Supply Chain Management (back to catalog)

...The table below shows some traditional metrics, or performance measures, for three functional areas of a typical organization:

Table 1. Traditional Functional Performance Measures
Manufacturing	Sales & Marketing	Engineering / R&D
Unit cost Labor cost Labor productivity Quality, scrap rate Plant utilization Plan vs. actual production	Market share Revenue Sales growth New "hot" products Customer satisfaction	Functions/features Labor & material cost Time-to-market Award-winning designs Design for manufacturability, assembly, etc.

Looking at the examples in Table 1, approximately what percent of these traditional functional metrics are common across more than one functional area?

Instructions	Choose one	Answer
Choose your answer from the next column; Answer column will show correct/incorrect	Less than 25%
	Between 25% and 50%
	More than 50%

You wouldn't give your sales team tool belts and send them down to the assembly line any more than you would ask your engineers to do market research. While there are obvious benefits to the traditional functional organization (e.g., the ability to focus attention on particular skills needed for various parts of the business), it turns out that the standard performance measures for those functional areas can often hinder supply chain improvements. In this module we'll show examples of how that can happen and describe ways to reduce or avoid the problem...

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SCM105 Specifications

Title: Performance Measures for Supply Chain Management

Rating:

4.3 / 5 (1155 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: Download

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