Performance measurement KPI assessment
Move your operations forward by measuring what is important, understanding key metrics and implementing a performance measurement KPI process that drives real change for your business.
Improvement gains will come when we understand how to measure supply chain performance. As DIFOT is a typical target, do we understand the cost of performance and what KPI's need to be managed to deliver the right results? As traditional methods rely on static ERP data that links sales history, forecasts, inventory and production, we embrace an approach that provides information in real time through simulation.
By integrating your ERP and WMS systems with our simulation model, advanced predictive analysis techniques can be used to improve decision making to increased supply chain performance. Equip your supply chain manager, warehouse manager or logistics manager with the right tools to make significant improvements in business performance.
How to measure supply chain performance
Start with sales forecasting to measure how effective the current process is within your business. Look at how inventory is planned, and the differences between what you expected to buy or make versus the actual outcome. Understand the error by using a statistical analysis. Implementing statistical analysis tools is not a silver bullet, rather sales forecasting analysis and review needs to be a process.
Look at past product performance, seasonal and non seasonal promotions, understand what your ERP system requires to generate sales forecasts. The use of tools within your business, the impact of planning settings and the management of lead-time, safety stock triggers all have an impact on inventory investment.
Every ERP system has the ability to produce and release vendor plans for discrete, blanket or periodic orders. Implementing a vendor management program is important as it provides the ability to not only measure performance, but work with your vendor to improve KPI performance.
In the real world there are many events that will cause a vendor to delay a delivery or short supply an order. By using a vendor management program, your planners can drill down into specific issues that are causing problems with vendor deliveries and implement change programs to improve performance.
As the scale of each warehouse operation may vary, the core functions of receiving, replenishment, pick/pack and despatch are the same. As these functions are typically supported by an integrated ERP with a WMS, it is important to measure the performance of each core function.
A warehouse simulation model can link each of these functions to measure how long it will take to fill a work order from receipt to despatch. Imagine being able to determine how many resources are needed to complete all of your orders for the day and what the projected DIFOT result will be?
Every functional processes can be monitored and measured regularly to drive performance improvement. The establishment and sharing of agreed Key Performance Indicators will provide each department with baseline for performance measurement.
The final leg of your supply chain usually represents the tipping point for the level of customer satisfaction achieved. For cost management and control reasons, most businesses tend to use a range of providers that specialise in metropolitan, regional or interstate transport.
As each transport provider has their own systems to track and trace your order, the lack of end to end visibility may rely on your despatch function to expedite outstanding deliveries. Service level agreements must be established with each vendor and incorporate performance criteria for order management.
Customer Relationship Management
The strength of your customer service team is a function of your supply chain's health. When your supply chain has the ability to manage the flow of information and order volume within a warehouse operation, where responsiveness relates to the ability to scale up and deliver within unplanned or compressed timeframes.
The final component is the level of integration that provides the customer service team with order visibility for track and trace. With disconnected processes, customer satisfaction can be measured by the level of noise generated and the purchasing power of your customer. Supply chain analytics helps to provide a viewing platform that will minimise noise and improve a customers experience.
Feel free to contact our office for advice or to discuss any specific project requirements.