Developing An Overview of Supply Chain Performance Metrics,McKinsey,This document gives an overview of the different metrics that can be used to measure supply chain performance,The Supply Chain CoEs objective is to define a benchmarking framework capable of: Comparing generic metric performances for use on projects. Capturing further benchmarking data in a consistent format. The London Shops task: Develop an overview of the different metrics to measure supply chain performance. Select the most important metrics that can be used across industries. Discuss how the most important metrics link other operational metrics within each stage of the supply chain. Suggest how the supply chain CoE should continue concerning this topic.,We used information from several sources during our project,Internal and external documents: High level benchmarking framework for supply chain performance (H .Cook): Shop Study (March 1997) accessing information from available experts and past projects. Supply chain benchmarks and best practice (Dow Polyurethane & Epoxy April 1995). Supply Chain Benchmark Assessment (March 1997). Supply chain appraisal and benchmarks: (client X September 1997). Discussions with supply chain CoE: Graham Colclough. Andrew Morgan. Lee Sherman. Deborah Huff (Cap McKinsey).,Possible data sources,CIPS (UK): Purchasing (& Supply Chain). APICS (US): Supply Chain. CAPS (US): Purchasing & Supply Chain (US & Legal): Research Benchmark Industry Listings (http:/www.capsresearch/htm). NAPM (US): Purchasing. Kaiser Associates: Benchmark Specialist Consultant. US University Research: New global initiative (investigating entry opportunitiesBob Ackerman).,Performance measurement is an important but complex subject,This documents an initial step in the right direction.,Companies see the need for metrics. . .,. . . but developing the “right” set of metrics is a challenge,“If you cant measure, you cant manage, you cant motivate” Establishing the proper measures within an organisation enhances continuous,No commonly used “model”. Business issues that warrant performance measurement: Differ between industries. Differ within industry. Change overtime.,There is no one “right” answer,We used a generic supply chain framework as a basis for our analysis . . .,Supply Chain Framework,Purchasing,Information Flow,Forecasting & Production Planning,Customer Service,Inventory Management,Inbound Logistics,Manufacturing,Maintenance,Marketing & Sales,Outbound Logistics,Integrated Supply Chain Management,This framework aligns with the CoE POV and is also similar to framework for the supply chain diagnostics inventory database.,. . . and concluded there are three strategic objectives we should focus on when analysing the supply chain,Key metrics must give information on how a company is performing against old strategic objectives.,Supply Chain Framework,NB: Boundaries NPDI Support functions,Tailor to company specific (BSC) objectives,We began with a brainstorming session on the key drivers for quality, time and cost,The complete picture can be found in the appendix.,We looked at the supply chain from the customers perspective. We brainstormed on “what could go wrong along the supply chain”: What are drivers of performance from a quality, time and cost point of view.,Price,Service,Product quality,Product quantity,Product delivery,Late arrival,Late delivery,Inventory cost,Product cost,Produc-tion cost,Delivery cost,Customer service cost,Quality,Time,Cost,Making their client specific warrants attention,Respect all sources of data: Understand their relationshipsthe “causal tree”: Recognised Cross-Industry; In-Industry and In-Company similarities and differences.,Making their client specific warrants attention (cont.),Recognise Cross-Industry; In-Industry; and In-Company similarities and differences. Interface the solution to the current clients measures, systems, processes and culture: . . . and guide migration over time.,Ensure accountability for collecting and actioning is clear.,Proposed Supply Chain KPIs,KPIs help to identify “where” the performance problem is within the supply chain, and steer towards areas to explore “why”.,Accuracy (as % of sales),Customer satisfaction,% of satisfied customers,Total cycle time,Time (for customer) from placing order to receiving goods,% of products delivered on time,Total supply chain cost as % of sales,Cost per product sold as % of sales,Cost as % of sales,% of products delivered according to customer order (quantity/quality),% of customers satisfied with service,% of products ordered already in stock,Defect rate of products as % of production,% of goods delivered according to order (quantity/quality) by supplier,Time from order placement to reception of goods,Time from production order to delivery into finished product warehouse,Downtime as % of total production time,% of goods delivered on time by supplier,Cost as % of sales,Cost as % of sales,Cost as % of sales,