Is It Time to Review Your Supply Chain Metrics?
Supply Chain Metrics
Supply chain metrics matter because a supply chain represents an investment – often a significant one – and on every investment it’s smart to analyze returns.
Because were busy, we often put metrics in place and then collect data for years without giving much thought to whether or not the metrics should be updated. This can be problematic when you operate in a dynamic marketplace. Periodically, it makes sense to assess whether or not your supply chain metrics are still linked to top level goals such as revenue growth, improving margins, or customer retention.
Reviewing Your Metrics
When you review metrics, common questions to ask include:
- Do you have too many metrics?
- Do any metrics reflect conflicting supply-chain goals?
- Is the data you’re collecting for the metrics reliable?
With all metrics, be sure ownership is clear. Who will be held accountable for well-defined real results?
Taiichi Ohno is the engineer responsible for the Toyota production system which evolved into lean manufacturing in America. He said, “Costs do not exist to be calculated. Costs exist to be reduced.”
If reducing costs is your goal, start by looking at the supply chain metrics you’re measuring. Consider how this data impacts your goals, and determine if you need to come up with something new to measure and manage.