Key Performance Indicators (KPIs) are an efficient way to measure the overall health of an organization, project, team, or individual, When it comes to supply chain and logistics operations however, there’s often confusion over which metrics to use or even how many KPIs there should be. The truth is, there isn’t a standard number of KPIs that must be used. The specific measurements and number of metrics to utilize completely depend on your specific needs.
Lead time has a significant impact on inventory level. Thus, reducing lead time should be top of mind for manufacturers looking to better control their parts inventory. Long lead times tie up cash in huge inventories. This is cash that could be better used elsewhere in the business such as generating more sales or improving competitiveness.
Cooperation is necessary for any supplier agreement to be successful. However, successful cooperation in supply chain management relies significantly on effective contracts. Supply chain management contracts require clear, guidelines understood and agreed upon by all relevant parties. To create better contracts and manage them well, it’s necessary to carefully consider a few key elements.
A key prerequisite of supply chain optimization is real-time supply chain visibility. In the ideal state of the demand-driven supply chain, material flows in a synchronized fashion from one tier to the next, while remaining responsive to variation. Visibility’s power is in its ability to drive the supply chain partners towards realizing this ideal by reducing risk, supply chain waste (cost), and speed to market.
Lean is a collection of operational concepts, frameworks, and approaches for driving continuous improvement in organizations. Lean accompishes this through relentlessly focusing on maximizing customer value while minimizing the 8 wastes, such as inventory.