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ratio or a percentage. Characteristics of Good Measures Questions about a metric ―Is it quantitative?‖ ―Is it easy to understand?‖ Aligned with the reward system ―Is the metric visible?‖ On time delivery ―Does it encourage appropriate behavior?‖ If qualitative, it should be backed up with quantitative data •Specific
•Consistent How do users get it? ―Does the metric encompass both outputs and inputs?‖ In process measures Questions about a metric (cont) ―Does it measure only what is important?‖ ―Is it multidimensional?‖ ―Does the process use economies of effort?‖ Balance scorecard approach
KPI’s Is it worthwhile? ―Does it facilitate trust?‖ Is it valid? •Specific
•Consistent Do Customers Use These Measures to
Evaluate Your Performance? Figure 5-2 What Supplier Performance Metrics Do Companies Use? On-time delivery
Quality of goods/services
Compliance with contract terms
Environmental, health, and safety performance
Source: Logistics Management (January 2006) 90%
29% Evolving Customer Service Requirements Evolving Customer Service Requirements
Cost reduction ROI Shipped complete Delivery complete Distribution Center focus Store shelf In stock at DC In stock at retail Inventory replenishment Flow logistics Local management Reg...
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- Fall '12