LONDON SHOP
Developing An Overview of Supply Chain Performance Metrics
Process, Recommendations
THE
McKinsey
October 2003
This document gives an overview of the different metrics that can be used to measure supply chain performance
• Discussions with supply chain CoE:
– Graham Colclough. – Andrew Morgan. – Lee Sherman. – Deborah Huff (Cap McKinsey).
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Possible data sources
• CIPS (UK): Purchasing (& Supply Chain).
• APICS (US): Supply Chain.
• CAPS (US): Purchasing & Supply Chain (US & Legal):
• No commonly used “model”.
• Business issues that warrant performance measurement:
– Differ between industries. – Differ within industry. – Change overtime.
• The London Shop’s task:
– Develop an overview of the different metrics to measure supply chain performance. – Select the most important metrics that can be used across industries. – Discuss how the most important metrics link other operational metrics within each stage of the supply
– Supply chain benchmarks and best practice (Dow Polyurethane & Epoxy April 1995). – Supply Chain Benchmark Assessment (March 1997). – Supply chain appraisal and benchmarks: (client X September 1997).
chain. – Suggest how the supply chain CoE should continue concerning this topic.
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We used information from several sources during our project
• The Supply Chain CoE’s objective is to define a benchmarking framework capable of:
– Comparing generic metric performances for use on projects. – Capturing further benchmarking data in a consistent format.
continuous
Assigning
Linking strategy to action
Accountability
accountability to take action when needed
Focus
. . . but developing the “right” set of metrics is a challenge
Communication
Measuring progress towards goals through
• Internal and external documents:
– High level benchmarking framework for supply chain performance (H .Cook): • Shop Study (March 1997) accessing information from available experts and past projects.
Companies see the need for metrics. . .
• “If you can’t measure, you can’t manage, you can’t motivate”
• Establishing the proper measures
பைடு நூலகம்
within an organisation enhances
opportunities—Bob Ackerman).
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Performance measurement is an important but complex subject
– Research Benchmark Industry Listings ().
• NAPM (US): Purchasing.
• Kaiser Associates: Benchmark Specialist Consultant.
• US University Research:
New global initiative (investigating entry