Understanding the Concept of Supply Chain and Finding Quality Supply Chain KPIs

Before finding the quality supply chain KPIs, you will have to firstly understand the actual theme of supply chain. As a matter of fact, supply chain is the process of transferring goods and services from supplier to customer. It transforms mineral deposits, reserves and mechanisms into finished product that it actually delivered to the end buyer. One of the significant aspects of supply chain is its connection with value chains. 

There are two important kinds of supply chain models. These are known as SCOR (Supply Chain Operations Reference) and Global Supply Chain Forum (GSCF) models. The SCOR is developed by the Supply Chain Council, which measures the total supply chain performance. It includes various elements such as delivery, order execution, manufacturing flexibility, assurance and other components in measuring the overall effectiveness of a supply chain.

As far as GSCF model is concerned, it has two imperative processes i.e. cross functional and cross firm process. Each process in handled by a cross functional team, including logistics supervisors, manufacturing, procurement, investment, advertisement, research and development. When it comes to supply chain management, it will include planning, development, production and return. Overall, supply chain management is a process used by the companies to ensure that their supply chain is well-organized and productive.

Key performance indicators (KPIs) are such unique and versatile indicators that can bring forth dramatic changes in an organization immediately. Actually, KPIs are quantifiable measures, which will help the companies define and calculate progress toward achieving their organizational goals. It is often examined that companies make use of stacks of indictors for measurement, which is absolutely a wrong idea to be employed. Therefore, you will have to be extremely choosy about the KPIs so that you may not have to face any problems in future. 

If you want to use KPIs for your supply chain more effectively, you will have to fully understand the real concept of key performance indicators in detail. As a result, you will be able to make use of relevant KPIs for your supply chain management. Then if you go with ratio form, it will create positive impacts on your clients. However, it can create some negative impacts on your customers due to their loss of basic raw data trends.

One of the best ways of finding the quality supply chain KPIs is to bear in mind Parento’s Principle. It manifests that almost 80% of your gains will actually derive from 20% of the activities going on within your firm. Hence, merely 20% of your supply chain KPIs will assert the flow of the movements inside your supply chain itself. Thus, more powerful administrative decisions will be taken and their will be in-depth scrutiny and elucidation of data collected by the control panel itself.

In short, one has to say that supply chain is a well organized process of moving products or services from supplier to customer. It will become more efficient when you find the quality supply chain KPIs. All you have to do is to fully learn the procedure of supply chain and supply chain key performance indicators so that you may not have to face any problems in achieving your organizational goals.