Supply chain management in retail is not just about having a well-oiled system; it’s about survival in the cutthroat world of manufacturing and distribution. When organisations have problems with their supply chains, customer satisfaction decreases, and expenses rise with competitiveness lost.
This is why it is important to monitor your sales and operations planning KPIs closely to ensure that everything is running smoothly. Such measures are useful in identifying problems at an embryonic stage as well as in enhancing organisational efficiency before a problem escalates into a major one.
The good news? These allow for real time tracking, hence it becomes easier to isolate the areas of weakness that need to be worked on.
Below is a list of six supply chain KPIs that every business should track:
Punctuality is something that cannot be compromised especially if you are a third party supplier. Lack of timely shipment not only leads to inconvenience but it creates havoc in the operations of other departments as well. Expected delivery times are mandatory, but keeping track of them becomes complicated with growing delivery volumes.
One of the best metrics to use here is OTIF which stands for on-time, in-full which helps in determining the level of satisfaction of the client. Hit this target, and you will gain trust while maintaining a reasonable price level.
Seen in supply chain terms, inventory is cash committed or money locked up. ISR is a detailed method that compares the value of inventory to the net sales over a certain period of time. This metric helps you understand if your inventory levels are rather balanced or if they have an adverse effect on the cash flow.
Other helpful metrics include:
Days Inventory Outstanding (DIO): Measures the time that stock is held without selling.
Inventory Turnover Ratio: A measure of how often inventory is used up and replenished within a particular period.
Purchase order tracking is crucial in real-time to identify problems as soon as possible. When it comes to delay in shipment or missing items, proper visibility of orders can help you take necessary steps.
Modern platforms offer dashboards that allow seeing every order through the lens of status, supplier, and transport type. It becomes easier to quickly track goods when updates are colour-coded, and this really puts one in a position of control.
The metric DSI reveals the time it takes to sell your inventory. High DSI could be an implication of slow sales or excess stocks, which are both unfavorable in terms of cash flow.
It can be used to manage the top line and to communicate with your sales, marketing, and supply chain functions to address issues that slow down lead conversion.
The perfect order delivery rate measures the proportion of deliveries free of error. It is an external indicator which can be effectively used to attract your customers.
Achieving this KPI involves coordination across your whole supply chain process, right from stock records to managing the orders. When conducted properly, it gives a nod towards your steadiness and organizational efficiency.
Transport cost is one of the major overhead costs which has an impact on any company. Freight costs per tonne analysis involves distributing total transport costs by each transport mode: road, rail, sea, or air, and identifies cost-saving opportunities.
In today’s competitive market, visibility is key. By tracking sales and operations planning KPI’s, Merchmix captures the supply chain dimension and enables you to reduce expenses, manage stock, and respond to customers’ needs.
Get in touch with the team to revamp your inventory strategy today!
Publish Date : 2025-01-11
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