Using KPI to Evaluate Your Supply Chain Performance
Table of Contents
Supply Chain Performance
One of the elements in supply chain management is evaluation. This process aims to see whether supply chain activities run according to the initial plan or still need improvement. There are many steps you can take after getting the results of your business supply chain performance.
Have you implemented supply chain evaluation? Here are some things that can be used as a basis for evaluation, known as supply chain KPIs that you can apply.
Perfect Order Fulfillment
Defined as percentages of order that have been delivered perfectly to the right place, according to the client’s request with perfect documentation.
Components in POF include:
– Completely delivered units of product according to the quantity
– Complete documentation (shipping documents, billing letters, etc)
Formula:
Total order – damaged order
________________________________ x 100%
Total order
Read More: What is Order Fulfillment Rate? How Can You Improve It?
Days Sales of Inventory (DSI)
The average time that a company takes to convert inventory (including goods in production) into sales.
Formula = (Inventory/COGS) x 365
Customer Order Cycle Time
The period needed by consumers, starts from placing an order until receiving the goods. The elements are receiving orders, preparation, and delivery. This KPI is important to monitor the quality of the company’s supply chain and provide an overview of how fast the process is running because it’s directly related to customer satisfaction.
Fill Rate
The ability to fulfill the order based on stock availability. Companies are challenged to plan as accurately as possible, so that market demand could be met as soon as possible. To create supply chain effectiveness, companies can differentiate the fill rate of each product according to consumer demand in the market.
Inventory Turnover
Inventory turnover is a measurement used to see how many times inventories are sold in one year. Companies can measure how quickly sales of inventory happen and benchmark it against the competitors’ averages in the field.
Those are some indicators that you can use to measure a company’s supply chain. Be sure to conduct evaluations to identify deficiencies and improve supply chain performance.
On top of that, monitor your company’s supply chain visibility in real-time by utilizing an integrated system. Advotics provides a variety of products to suit your needs, from managing warehouse inventory to monitoring field staff. Click here to see more about Advotics products.
