Metrics Every Supply Chain Manager Should Track

Your dashboards are green but your problems keep getting worse. You're tracking revenue per employee, units produced, and efficiency percentages. All trending upward. But customers still complain about quality. Equipment still breaks down unexpectedly.   Operators still struggle with changeovers. Here's why most metrics miss the mark: They measure what happened yesterday. Not what will happen tomorrow. They focus on outputs. Not the inputs that create those outputs. These 8 KPIs actually predict and prevent problems: 1. OEE (Overall Equipment Effectiveness) Shows equipment reality, not just availability 2. First Pass Yield Reveals true process capability 3. Total Cost of Quality** Captures the real price of problems 4. Employee Suggestion Implementation Rate Measures engagement that drives improvement 5. Setup/Changeover Time Determines your flexibility advantage 6. Supplier Quality Performance Prevents problems at the source 7. Safety Leading Indicators Predicts incidents before they happen 8. Customer Complaint Resolution Time Shows responsiveness that builds loyalty Each metric drives specific behaviors. OEE pushes systematic waste elimination. First Pass Yield forces quality at the source. Cost of Quality makes prevention profitable. The best manufacturing teams measure fewer things. But they measure the right things. And they act on every single number. Stop measuring your past. Start predicting your future. Question for you: If you could only track one KPI for the next 90 days, which would drive the biggest change?

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?