Effective supply chain management can mean faster production cycles and lower costs. It’s an essential element of your business, and improving it begins with a thorough assessment of your current supply chain management. Getting a clear baseline of your how efficiently — or inefficiently — things are operating right now is the first step to determining the ROI of future efforts and to improving your systems.

Your supply chain assessment will only be as good as the performance metrics it looks at, so assessing your supply chain management begins with developing strong performance metrics. Performance metrics should be easy to understand, objective, and relevant. Finally, the metric should be one that drives employees to do what you actually want them to do. For example, if your goal is to ship x number of packages a day, and your employees start shipping packages willy-nilly without attending to other important aspects of your business, like strong presentation, the metric will have failed to drive desirable behavior.

Finally, select metrics that are easy to gather data on. If gathering and analyzing performance metrics becomes too time consuming, you risk losing as much as your analysis has helped you to gain.

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Article by Charles Jackson, President of AFEUSA

Charles Jackson AFE Board