As I sat in a SCOR training class to learn more about the Supply Chain Operations Reference model which provides the executive level viewpoint on supply chain, I thought about the importance of metrics to running your business.
More than the importance of metrics in general, the key is to focus in on the select few that can benchmark your performance and ignore the rest. In essence, the SCOR model provides a methodology option to support the review of your high-level supply chain. It’s one of the main reasons clients call me….to look at the supply chain from a strategic viewpoint and help them figure out which critical few projects and associated metrics will have the largest impact.
In today’s marketplace, the Amazon Effect has taken hold and expectations are elevated. My firm completed research on this topic and I’m writing a book on the Amazon Effect – the bottom line is that if you aren’t paying attention to these elevated expectations and how you’ll raise the bar to meet them and go beyond, you’ll be left in the dust by those who will.
To avoid being left in the dust, focus on the key high level metrics for the supply chain – reliability, responsiveness, agility and cost and asset management efficiency. If you are not reliable, you can’t even get in the game. Amazon is known for responsiveness. Same day delivery, Sunday delivery, drone delivery pilot programs – they constantly push the envelope. Amazon is also known for agility – if the customer changes his mind, how easy is it to stop or change an order? Quite easy! What if you receive a defective product? How easy is it to return? Think about how prepared you are for changing conditions and how quickly you can respond. Certainly, we all think about cost – no one can afford to add cost to their product as customers are unwilling to pay for anything that isn’t viewed as high value. And, asset management efficiency relates significantly to cash flow – the faster cash moves through the process steps, the better.