Measuring Supply Chain Success With Data Analytics

Key Takeaways: 1) Distinguish KPIs from Metrics: KPIs is a metric- but not all metrics are KPIs. A KPI is a strategic metric that: - Directly supports your organization’s top-level goals - Has clear executive buy-in and ownership - Cascades effectively to operational and individual levels ➤ Focus on the cross-functional KPIs that are applicable at all levels and aligned with the strategic goals 2) Adopt a Tiered KPI Framework: Use a 3-tier system to connect strategic priorities to day-to-day actions: - Tier 1: Strategic KPIs aligned with corporate objectives - Tier 2: Diagnostic metrics for root cause analysis - Tier 3: Operational metrics for team and individual accountability ➤ This hierarchy enables faster insight, alignment, and corrective action. 3) Move from Reporting to Action: Dashboards and scorecards aren’t just tools — they are part of your governance engine. - Use them to monitor, analyze, and respond, not just to report - Make data transparency and regular performance reviews a habit, not a chore 4) Accelerate with GenAI & ML: Next-gen technologies can supercharge KPI governance by: - Detecting anomalies and trends earlier - Automating analysis and forecasting - Providing actionable insights before issues escalate ➤ These tools enable proactive performance management, not just reactive correction. 📚 Reference: To dive deeper into Effective KPI Governance and Performance Measurement see: “Realizing Value from Digital/Gen AI/ML-Driven Supply Chain Planning Transformations” https://lnkd.in/g6JbA6Mf

Over the past few weeks, I've frequently been asked by the leaders I’m advising to share key performance indicators (KPIs) that organizations should consider as they embark on their supply chain digital transformation journeys. This has sparked important conversations about the necessity of aligning metrics with specific organizational goals and execution strategies. It also opened the door for candid conversations as to the need to engage staff in the process to allow for organizational enrollment which is crucial to long term success as it fosters a shared understanding of what success will look like and helps ensure that the selected metrics are tailored to your unique business context. Given the frequency of these requests, I thought it might be helpful to many to share a few common starting points for organizations to consider with the understanding that these must be tweaked for your own journey and this list is certainly not exhaustive… Digital Adoption Rate: Track the extent to which supply chain processes have been digitized, indicating progress in transformation. Order Fulfillment Rate: Track the percentage of customer orders fulfilled on time and in full. Inventory Turnover: Measure how frequently inventory is sold and replaced, highlighting efficiency in inventory management. Supply Chain Cycle Time: Assess the total time from order initiation to fulfillment, revealing areas for improvement. Perfect Order Rate: Evaluate the percentage of orders delivered on time, complete, and undamaged. Cost to Serve: Understand the total costs associated with fulfilling customer orders, including logistics and overhead. Forecast Accuracy: Monitor how closely your demand forecasts align with actual sales to enhance planning. Return on Supply Chain Investments (ROSI): Measure the financial returns from your investments in supply chain technologies and processes. Supplier Lead Time: Analyze the average time taken by suppliers to deliver goods, impacting your operations. Customer Satisfaction Score (CSAT): Gauge how satisfied customers are with product availability and order fulfillment. Curious to know what others think of this list as well…. #SupplyChain #DigitalTransformation #KPIs #Leadership #BusinessGrowth

Supply chain planning cannot breathe without metrics. This infographic shows 7 critical metrics: # 1 - WMAPE (Weighted Mean Absolute Percentage Error) ↳ (SUM(ABS(Forecast - Actual)) / SUM(Actual)) * 100 ↳ Measures forecast accuracy. Lower = better.   # 2 – Bias ↳ (SUM(Forecast - Actual) / SUM(Actual)) * 100 ↳ Shows if forecasts over- or under-estimated demand   # 3 – OTIF ↳ (SUM(Orders Delivered On Time and In Full) / SUM(Total Orders)) * 100 ↳ Service level; orders delivered as promised   # 4 - Inventory Turnover ↳ SUM(COGS) / ((Beginning Inventory + Ending Inventory) / 2) ↳ How fast inventory is sold and replaced   # 5 Plan Attainment ↳ (SUM(Actual Output) / SUM(Planned Output)) * 100 ↳ Execution vs. plan reliability   # 6 - Cash conversion cycle (CCC) ↳ CCC = DIO + DSO – DPO ↳ DIO = (Average Inventory / SUM(COGS)) * 365 ↳ DSO = (Accounts Receivable / SUM(Revenue)) * 365 ↳ DPO = (Accounts Payable / SUM(COGS)) * 365 ↳ Days to turn cash outflows into inflows   # 7 - EBITDA ↳ Net Income + SUM(Interest) + SUM(Taxes) + SUM(Depreciation) + SUM(Amortization) ↳ Profit from core operations Any others to add?