Retail Supply Chain's Kpis

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Key Performance Indicators of Retail Sector and its Improvement Opportunities


This paper attempts to track key performance indicators (KPIs) in order to figure out the performance of the Supply Chain in the retail sector. It also focuses on inventory replenishment strategies and capacity utilization in the retail sector. In recent years, this sector has spent considerable amount of time and money trying to improve its operations in such a way so as to respond efficiently to customers’ needs. This has led to several developments like the introduction of automated store ordering, usage of RFID and etc.
The KPIs helps in directly analyzing the performance of every specific activity and operation and hence also helps in
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• Average time difference between LOGR and LOGC: when Logistic support is required a LOGR is set to the work order and after completion of the logistic activity.
• Material value add : Sell price minus material cost divided by material cost.
• Supply chain cycle time: The total time it would take to satisfy a customer order if all inventory levels were 0.
• Fill Rate: The number of items ordered compared with items shipped. Fill rate can be calculated on a line item, SKU, case or value basis.
• On time ship rate: What percent of orders where shipped on or before the requested ship date. On time ship rate can be calculated on a line item, SKU, case or value basis.
• Perfect Order Measure / Fulfillment: The error-free rate of each stage of an order. Error rates are captured at each stage (order entry, picking, delivery, shipped without damage, invoiced correctly) and multiplied together.
• Customer order cycle time: The average time it takes to fill a customer order.
• % of backorders: The number (or percentage) of unfulfilled orders.

Inventory: Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory are held in order to manage and hide from the customer the fact that supply delay is longer than delivery delay, and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of

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