Key Performance IndicatorsControlling in Supply Chain ManagementFalling IT budgets, difficult economic circumstances, scarcity of raw materials and crisis situations – all these factors can put pressure on your business. SCM can considerably alleviate this and provide you with tools (key performance indicators) to help you tackle these situations.Changes in key performance indicatorsStudies show that the use of IT and SCM in particular have a positive effect on the competitiveness and success of a company. It has been shown that key performance indicators such as net profits rose sharply, detailed forecasts led to a significant reduction in costs and to an increase in turnover, warehousing costs were decreased through the reduction of old inventories, and the launch of new products was much simpler.
Key performance indicators (KPIs) describe sensitive areas that are sometimes difficult to measure and may indicate both positive and negative changes early on. In SCM, for example, costs are used as key performance indicators as well as delivery time, turnover within the warehouse and manufacturing time. IM&C has analysed the approach and methods of several well-known companies: Key performance indicators that take account of costs, such as overall costs and total cost of ownership, are most frequently used. The next most popular KPIs are return on investment (ROI) and the efficiency of logistics processes, expressed by key figures for delivery capacity and sales performance. Companies named pre-production cost reduction and production reliability as key performance indicators for manufacturing processes.
"Supply Chain Management continues to demonstrate
positive results related to cost reduction and financial
performance in general. With the continuing spread
between leaders, followers and laggards, the missed
opportunities have to spell the difference between
financial success and failure."
The sixth annual global survey of supply chain progress (2008) |
The use of supply chain management software is decisive in the success or failure of a company.
At the end of the chain the customer will profit from short delivery times, competitive prices as well as excellent service proves this by his loyalty to the company.
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