In today’s age of technological advancements, where customers and suppliers across the globe are interacting with each other without the constraints that physical boundaries or distances impose, managing expectations and ensuring that commitments are adhered to, mandates a much more integrated approach in every aspect of business.
Today’s customer expects the very best of what the market has to offer, tailored to suit personalized requirements in the least possible time, with uncompromised quality parameters and all this at the lowest possible costs. This is also what truly defines an intelligent supply chain management system.
To achieve this, an organization needs to ensure that its teams like planning, distribution, procurement, new product development, quality and manufacturing work in tandem and with seamless data and raw material flow. However, to ensure that each of these teams delivers to the best of its potential and works towards a common objective, it is important to have certain common threads that bind them.
Supply Chain Performance therefore needs to be measured using a set of Key Performance Indicators (KPIs) that represent in a nutshell this complicated relationship between numerous teams working towards the common aim of ensuring ‘Customer Delight’. Certain key parameters that determine the success of any supply chain are:
- Ensuring stringent quality control
- Reliable and repeatable manufacturing/service processes
- Lowest possible cycle times
- Zero raw material stock outs/unaddressed service requests
- Working capital management
- Minimum inventory of finished goods
- Maximum utilization of machinery and resources
It is imperative that these indicators are continuously measured and monitored by the supply chain team to deliver value at every stage to all stakeholders in the value chain.
Success of the sales and marketing team hinges on the ability of their counterparts in supply chain being able to deliver what the customer has been promised at the right time and with the ability of keeping a check on the costs.
However, good performance in one part of the supply chain is insufficient. Your supply chain is only as strong as its weakest link. The solution is for you to focus on the key metrics in each area.
While this does sound challenging, it is possible to achieve the seemingly complicated task of meeting your customer’s requirements by infusing your supply chain with an element of intelligence. What conventional business houses are therefore striving towards is the dawn of intelligent supply chain.
What this means is that instead of measuring supply chain effectiveness in a silo, the KPI’s chosen are often conflicting and bring balance. Inventory vs. time, cost vs. flexibility are just some examples.
Understanding your business dimensions and then defining the indicators that most suit you will give you a much better view of your performance as compared to going with a traditional set of parameters only. By measuring accurately, monitoring, reporting and taking corrective actions on time you can improve any area of the supply chain that can have an impact on customer experience.
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