Supply Chain Performance Measures

Certain characteristics should be incorporated into

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Unformatted text preview: easy to understand, involve employee input, and have economies of effort. Important guidelines for metric development for logistics and supply chains include consistency with corporate strategy, focus on customer needs, careful selection and prioritization of metrics, focus on processes, use of a balance approach, and use of technology to improve measurement effectiveness. Summary (cont.) There are four principal categories for performance metrics: time, quality, cost, and miscellaneous or support. Another classification for logistics and supply chains suggests the following categories for metrics: operations cost, service, revenue or value, and channel satisfaction. The equivalent sales increase for supply chain cost saving is found by dividing the cost saving by the organization’s profit margin. Supply chain management impacts ROA via decisions regarding channel structure management, inventory management, order management, and transportation management. Summary (cont.) Alternative supply chain decisions should be made in light of the financial implications to net income, ROA, and ROE. The SPM shows the relationship of sales, costs, assets, and equity; it can trace the financial impact of a change in any one of these financial elements. Supply chain service failures result in lost sales and rehandling costs. The financial impact of modifications to supply chain service can be analyzed using the SPM....
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This note was uploaded on 10/25/2012 for the course WCOB 3613 taught by Professor Jamescrowell during the Fall '12 term at Arkansas.

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