Metrics to Monitor Supply Chain Performance Trends

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

98% of the time, supply is NOT stable. This infographic shows 7 calculations of supply variability for supply and materials planners: # 1 - Supply Reliability (On-time Delivery Rate) ↳ Measures the % of orders that are delivered on or before the promised date ↳ Supply Reliability = (On-time Deliveries/ Total Deliveries) X 100 # 2 – Fill Rate with Variability ↳ Measures the % of customer demand met without stockouts, considering variability in demand ↳ Fill Rate = 1 – (Stockout Units / Total Demand Units) X 100 # 3 – Demand-to-Supply Variability Ratio ↳ Compares the variability of demand to the variability of supply ↳ Demand-to-Supply Ratio = σ demand / σ supply # 4 – Supply Lead Time Variability Index ↳ Assesses variability in the time suppliers take to deliver orders ↳ Lead Time Variability Index = σLT / μLT # 5 – Reorder Point (ROP) with Variability ↳ Adjusts the reorder point for variability in both demand and lead time, ensuring stock availability ↳ (Average Demand X Average Lead Time) + (Z×σLTD) # 6 – Inventory Positioning with Variability ↳ Adjusts the inventory position by considering variability in lead time demand ↳ Inventory Position= On-hand Inventory + On Order Inventory – Backorders + (σLTD×Z) # 7 – Inbound Shipment Variability ↳ Tracks how much actual inbound receipt dates deviate from the planned receipt dates ↳ Inbound Shipment Variability = square root of the average of the squared differences between actual and planned receipt dates Any others to add?