Supply-chain management is an important consideration of Operations Management. In the past, many businesses only focused on the operations occurring within. Even today, business push to increase standards of performance and quality, create better marketing strategies, improve efficiency in the workplace, and hire and train employees as part of human resource strategy, among other ‘inside’ actions. However, it is a growing reality that there are other ‘outside’ factors and stakeholders in the final product/service: it is a cumulative effort. As a result, these factors should be considered as an integral part of Operations Management Strategy.
Businesses implement supply-chain management by creating linkages between supplier and
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AMR stresses that a comprehensive metrics-system considers the right balance of both quantitative and qualitative mechanisms. Unfortunately, much of the data and information needed to analyze operational and innovation excellence inclusively is not readily available. Therefore, AMR supplements information found with financial measures, recognizing that using purely financial metrics to evaluate the state or success of supply-chain management is insufficient.
For supply-chain management, the ideal metric system considers basic dimensions of performance: operational excellence and innovation excellence. These two performance dimensions give way to four key metrics the AMR ‘wished they had’: (1) Perfect Order Rate; (2) Total Supply Chain Costs; (3) Time to Value; (4) Return on Product Launch.
(1) Perfect Order Rate
According to Klipfolio (2015), the perfect order rate calculates the success rate of orders that are shipped or delivered without incident. In this case, incidents include damaged goods (goods with malfunctions or defects), delayed shipments (goods arriving later than the specified time period), or inaccurate orders (shipping the wrong thing to the wrong person).
It can be surmised that a business with a high perfect order rate has mastered efficiency with the supply and distribution relationship. A high perfect order rate also indicates customer satisfaction (since customers would express
Supply Chain Management: An International Journal, Volume 7, Number 5, 2002, pp. 271 – 282;
Success for many organizations depends on the firm’s ability to balance product and process changes while exceeding customer expectations for improved cost delivery and quality. In lieu of these issues firms have started to implement principles of supply chain management. Supply chain management mainly involves managing the flow of incoming materials, manufacturing operations, and downstream distribution has to be in alignment that is responsive to change in customer demands eliminating a surplus of inventory.
Chase, R., & Jacobs, F. R. (2011). Operations and Supply Chain Management (13th ed.). Boston, MA: McGraw-Hill Irwin.
Russell, R. S., & Taylor,B. Operations and Supply Chain Management,8th Edition. Wiley, 2013-12-02. VitalBook file.
Bozarth, C., & Handfield, R. (n.d.). Introduction to operations and supply chain management (3rd ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
1. The unit or functional level. Function-based measures evaluate the performance of a single department or function—for example, the logistics function’s warehouse-picking accuracy. 2. The process or cross-unit level. An order-to-cash metric and a new-product-concept-to-first-sale metric both track the performance of work that cuts across individual departments. 3. The cross-enterprise level. Example: the vendormanaged inventory measure that Procter & Gamble uses to track not only the stock on hand in its own warehouses but also the inventory level its downstream partners maintain.
Russell, R. S., & Taylor III, B. W. (2014). Operations and Supply Chain Management, 8th edition. Hoboken, New Jersey: John Wiley & Sons, Inc.
However, this study only focus on operations dimension performance not for the supply chain as a whole. The measurement of performance of SCM entities can be improved by using a more balanced perspective as provided for by the BSC framework (Chia et al., 2009). This study apply balanced score card (BSC) approach on the logistics industry in order to measure supply chain performance but the results may not be representative of the individual clusters. In order to deliver a comprehensive performance measurement framework for SME’s, BSC and SCOR model must be integrated (Thakkar et al., 2009). This study relates the performance measurement with several supply chain cycles such as procurement, manufacturing, replenishment and customer order. However, this study does not cover the decision making levels. Supply chain performance has significant relationship with market orientation such as customer focus, competitor-oriented and cross-functional coordination (Lin et al., 2010) but this study only focus on innovation
Supply chain metrics can be used to align processes of all firms within the long term partnership supply chain and create a competitive advantage of lower costs. Supply chain metrics are typically used to determine how the company is preforming and how much capital investment is tied to inventory in comparison to
Chopra, S., Meindl, P., & Vir Kalra, D. (2016). Supply chain management: strategy, planning, and operation (6 ed.). (pp. 439-440). Person. Retrieved October 7, 2017
The only acceptable delivery record is 100% on-time, and if they could get better than 100%.”
(EHOW MONEY, 2011) The last would be delivery issues we would monitor this by using our case fill rate. If we are not shipping quality units on time we will eventually upset our customer and this will also increase our overall cost. By making sure we have a good shipper in place will only help the overall efficiency of the supply chain.
From the analysis of data as per response states that respondents are satisfied with the delivery of various information on time. 44% states that it is very good, 22% stating that it is excellent , 18% as average, 9% as bad and 6% as very
To maximize productivity and minimize cost. Some productivity measures that important to consider are: revenue sales per unit, stockout rate, and duration of order filling. The report explains the importance of building a strong supply chain management and how to develop strategies to make the store more efficient.
Kannan, V. R., & Tan, K. C. (2005). Just in time, total quality management, and supply chain management: Understanding their linkages and impact on business performance. Omega, 33(2), 153-162. doi: 10.1016/j.omega.2004.03.012