KPIs Measuring for Success CITT Webinar Series Date: Wednesday, - - PDF document

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KPIs Measuring for Success CITT Webinar Series Date: Wednesday, - - PDF document

Jul 31, 2023 224 likes •514 views

20/05/2015 KPIs Measuring for Success CITT Webinar Series Date: Wednesday, May 20, 2015 Time: 12 pm EST Hosted by: Laurie Turnbull, CCLP 1 1 20/05/2015 Webinar

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  • KPIs

Measuring for Success

CITT Webinar Series Date: Wednesday, May 20, 2015 Time: 12 pm EST Hosted by: Laurie Turnbull, CCLP

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Webinar Objectives

  • To increase awareness regarding the use of

KPIs (key performance indicators) to measure performance

  • Illustrate examples for collecting and reporting

KPIs

  • Highlight the importance of performance

measurement in logistics and supply chain management strategy

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Why Measure Performance?

  • Measuring supplier performance can be

an effective process for determining:

– If there is a strategic fit between your

  • rganization’s objectives and your supplier’s

capabilities – If the services being measured are aligned with your customer’s needs and goals

Your Supplier Your company Your Customer

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The Challenge

  • “Metrics are critical! We don’t know what the

new ones should be, but we need them.”

4 Fawcett, S.E., Ellram, L.M. & Ogden, J.A. (2007) Supply Chain Management from Vision to Implementation

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The Problem:

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What to Measure?

Suppliers Cost Service Quality Reliability Consistency Flexibility

Internal stakeholders? External stakeholders? Tactical KPIs? Strategic KPIs? Domestic / International? Impact of JIT, Six Sigma, Lean? Where do I get this information?

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KPIs:

Confirm what’s going well Identify problems areas Proactively resolve negative trends

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Different KPIs Needed

  • KPI measurements of organizational innovation should

extend beyond internal metrics to include value chain partners through supply chain mandates

7 Source: Global Business Strategy and Innovation: A Canadian Logistics Perspective

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Performance Measurement at IBM

  • IBM had 30 supply chains, one for each business unit
  • In 1993 IBM created “Integrated Supply Chain” (ISC)
  • By 2003 ISC operations encompassed:
  • 10 manufacturing sites worldwide
  • Global logistics (outsourced)
  • Parts procurement
  • Customer fulfillment/order entry/billing
  • Inventory management and ‘tracking to delivery’
  • Overseeing 19,000 employees in 56 countries
  • $45bn in spending

8 Source: Supplychainbrain.com

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Performance Measurement at IBM

  • "It's important that different functions not get

mesmerized by their own internal metrics…put customer value first and stay focused on end-to-end processes”

  • "We added new (metrics) that tie the entire supply

chain together with common goals and objectives, such as improvements in customer service or cash generated…"

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Sal Calta, ISC Vice President of Worldwide Manufacturing

Source: Supplychainbrain.com

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Performance Measurement at IBM

  • ISC has returned tremendous benefit to IBM and its

customers; based on 2005 numbers:

– Inventory was the lowest it has been in 30 years – Cycle time performance was up 6% – Overall customer satisfaction was up more than 1% – Sales productivity was up 25% – Achieved $6bn in cost and expense savings

10 Source: Supplychainbrain.com

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Traditional Measurement Categories

3 Areas of supply chain management:

  • Purchasing
  • Production
  • Logistics

Measured in 5 performance areas:

  • Asset management
  • Cost
  • Customer service
  • Productivity
  • Quality

Source: Fawcett, S.E., Ellram, L.M. & Ogden, J.A.: Supply Chain Management from Vision to Implementation 11

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Common Performance Measures

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Source: Fawcett, S.E., Ellram, L.M. & Ogden, J.A.: Supply Chain Management from Vision to Implementation

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(Excerpt) Asset Management Cost Customer Service Productivity Quality Logistics Inventory turns Total landed cost On-time delivery Order productivity Damage frequency Return on assets Outbound freight Order cycle time Picking / Shipping accuracy

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KPIs Contribute to Competitive Advantage

Can Apply To:

  • Transportation
  • Warehousing
  • Customer Service
  • Inventory
  • Customs Clearance

Can Be Measured In:

  • Units (i.e. materials, time)
  • %
  • Financial metrics

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KPI Roadmap

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  • 1. What to

measure

  • 2. Why to

measure it

  • 3. How you

will quantify it

  • 4. How often

you will measure it

  • 5. What data

sources you will use

  • 6. Who you

will share it with

  • 7. What changes

to make once data is collected:

  • No change
  • Reward suppliers
  • Punitive actions
  • 8. How you will

communicate information to stakeholders

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KPI Alignment

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Effective Strategy Aligns With Customer Needs

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FED EX Express Strategy

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“… plan to improve profitability … and secure the long-term viability of our business …” Through five initiatives:

Improve efficiency of staff functions and processes Modernize fleet with more fuel-efficient aircraft Improve U.S. domestic pickup and delivery operations Improve international profitability through diversification Target customer segments for improved yield

http://investors.fedex.com/company-overview/fedex-express/strategy/default.aspx

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  • Fed EX surveys customers on customer loyalty:
  • 1. How satisfied you are
  • 2. How likely you are to do business with FedEx
  • 3. Most importantly, how likely you are to

recommend FedEx

KPIs Support Strategy at FED EX

http://investors.fedex.com/company-overview/fedex-express/strategy/default.aspx

KPI

On time

KPI

On time

KPI

On time

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Walmart Strategy

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“At Walmart, we’re guided by our financial priorities – growth, leverage and returns”

Source: Walmart 2014 Annual Report

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Source: Walmart 2014 Annual Report

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KPIs Support Strategy at Walmart

Customer surveys ask: Did you find and buy everything you needed on this trip? How satisfied were you with the experience? How likely would you be to recommend Walmart? How likely are you to continue shopping at Walmart?

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http://survey.Walmart.ca

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Why KPIs are Important in Global Trade

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Global Top 10 Carrier Performance* Ranking – January 2015

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*Based on schedule reliability and container delivery reliability

Source: SeaIntel Maritime Analysis

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Why KPIs are Important in Global Trade

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Panama Canal Suez Canal

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Logistics KPIs (Transportation)

TACTICAL STRATEGIC

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  • E-commerce
  • Sustainability
  • Innovation
  • Quality programmes
  • Continuous

improvement

  • On-time performance
  • On-time pickup
  • On-time delivery
  • Equipment availability
  • Claims (Damage/Loss)
  • Invoicing accuracy

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Developing Supplier Scorecards

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Identify an objective for scorecards

Maintain / improve existing business Reduce number of suppliers

Determine relevant factors (consult with internal stakeholders as well as customers)

Determine “weight” of relevant factors

Communicate results to suppliers regularly

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Weighted Scorecards

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KPIs Need Data!

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Globalization & Supply Chain KPIs

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Consistency Flexibility / Agility / Visibility

Reliability

KPIs Contribute to COMPETITIVE ADVANTAGE