What are the most important metrics to track for a successful supply chain management system?

1 Customer Service Metrics

Customer service metrics measure how well the supply chain meets the expectations and needs of the customers. They include metrics such as order fill rate, order cycle time, on-time delivery, and customer satisfaction. Order fill rate is the percentage of orders that are fulfilled from the available inventory, without backorders or stockouts. Order cycle time is the average time it takes to complete an order, from the placement to the delivery. On-time delivery is the percentage of orders that are delivered by the promised date. Customer satisfaction is the degree of satisfaction that the customers have with the quality, price, and service of the products. These metrics help consumer electronics companies to evaluate and improve their customer service levels, which can enhance their reputation and retention.

2 Inventory Metrics

Inventory metrics measure how well the supply chain manages the inventory of raw materials, work-in-progress, and finished goods. They include metrics such as inventory turnover, inventory days, and inventory accuracy. Inventory turnover is the ratio of cost of goods sold to average inventory, which indicates how fast the inventory is sold and replenished. Inventory days is the number of days that the inventory can cover the sales, which indicates how long the inventory is held. Inventory accuracy is the percentage of inventory records that match the physical inventory, which indicates how reliable the inventory data is. These metrics help consumer electronics companies to optimize their inventory levels, which can reduce their storage and handling costs, and improve their cash flow and profitability.

3 Cost Metrics

Cost metrics measure how much the supply chain spends on various activities and processes. They include metrics such as total cost of ownership, cost of goods sold, and transportation cost. Total cost of ownership is the sum of all the costs associated with acquiring, operating, and maintaining a product, which includes purchase price, delivery cost, installation cost, maintenance cost, and disposal cost. Cost of goods sold is the sum of all the costs involved in producing and selling a product, which includes material cost, labor cost, overhead cost, and depreciation cost. Transportation cost is the sum of all the costs related to moving the products from the supplier to the customer, which includes freight cost, fuel cost, insurance cost, and taxes. These metrics help consumer electronics companies to identify and reduce their supply chain costs, which can increase their margins and competitiveness.

4 Quality Metrics

Quality metrics measure how well the supply chain delivers products that meet the standards and specifications of the customers. They include metrics such as defect rate, return rate, and yield rate. Defect rate is the percentage of products that have defects or errors, which affect their functionality or appearance. Return rate is the percentage of products that are returned by the customers, due to dissatisfaction, damage, or malfunction. Yield rate is the percentage of products that pass the quality inspection, out of the total number of products produced. These metrics help consumer electronics companies to monitor and improve their product quality, which can boost their customer satisfaction and loyalty, and reduce their warranty and rework costs.

5 Agility Metrics

Agility metrics measure how well the supply chain responds to changes and uncertainties in the market and the environment. They include metrics such as lead time, flexibility, and resilience. Lead time is the time it takes to fulfill a customer order, from the receipt to the delivery. Flexibility is the ability of the supply chain to adapt to different customer demands, such as volume, variety, and customization. Resilience is the ability of the supply chain to recover from disruptions, such as natural disasters, accidents, or strikes. These metrics help consumer electronics companies to enhance their supply chain agility, which can improve their customer service and satisfaction, and reduce their risks and losses.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?