Posted On :
Monday, May 30, 2011 By Prashant Meckoni
How do you know if your supply performance today is better than it was last week, or last year.
How do you know if your efforts are helping you, your customers, your vendors?
You definitely can't measure success absolutely. What you can do is measure the parameters that you think contribute to the success to your supply chain.
As in six sigma's DMAIC, the first step is to define what you are trying to improve and second step is to measure it quantitatively, and preferably absolutely with the required degree of accuracy and precision.
Lets take a sample of supply chain metrics that may be relevant to most manufacturing organizations.
1. Number of days of maximum production equivalent of raw material supply at hand.
2. Cumulative age of finished goods lying in warehouses & factories ready to be sold
3. Value of ready finished goods inventory yet not available for sales (may be in-transit)
4. Cost ...