Using Performance Dashboards in Supply Chain Management

The majority of KPI dashboards are overloaded with metrics. To get the most out of your SCM intelligence only the most appropriate metrics used by decision makers are needed. This article provides an outline of how to best use performance dashboards in Supply Chain Management

Using dashboards that are carrying large numbers of KPI's does not deliver information to SCM managers so they can make optimal decisions. Focusing on the key metrics that identify the main source of SCM business performance is vital and reducing the number of metrics used allows managers to understand better and far more intuitively what a metric is actually trying to tell them.

Avoid Too Much Information

"Less is more" or TMI (Too Much Information) are two of the comments that you will hear from SCM experts who truly understand the components of the business supply chain from procurement, processing and through to customer delivery.

In recent few years, RFID technology that allows tagging of containers, pallets and individual shipment items provides a mass of raw data on content, models, color, specification, origination and so on. It is extremely tempting to dive in and start thinking that all this data that we are now routinely able to collect and collate can somehow be manipulated to provide SCM managers with even more information that will help them make better and more profitable decisions.

However, little of this information is helpful to the SCM management team. By adopting Pareto's Principle and focusing on the 20% of metrics that are actually telling you how 80% of SCM business performance is being generated delivers better results.

Key SCM Metrics

Concentrating on the basics provides a far better SCM dashboard to focus managers on the real drivers of the supply chain process. This includes: cost reduction, better supplier management, shorter delivery times or better on-time delivery to customers, improving the efficiency of the manufacturing chain and being able to distil this in a format that presents information against pre-set indicators and historical trend data.

Only include the following KPI on your SCM dashboard:

1. Production on Time and Complete
2. Supplier Fulfillment on Time and Complete
3. Perfect Order Fulfillment
4. Perfect Order Lead Time
5. Expedited Order Fulfillment
6. Customer Return Rate
7. Cash to Cash Cycle Time

These are seven KPI's provide the supply chain management team with insight into 80% of the drivers of SC performance. Any more information will likely result in data overload, delays in decisions and confusion over what the metrics are actually trying to tell you.

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