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Aligning business rules and performance goals (2/2)

Aligning your metrics with your Customers and Suppliers

As a second part to the article on aligning business rules and performance goals, it is vital to place the Customers at the center of your metrics! Shaping and building a Customer centric organization should be on the top of the agenda of any supply chain leader.. Designing true Customer focused metrics is not an easy task, first of all it requires to "speak the same language" and identify common elements for measurement. Once done, it pushes you to think end-to-end, only by having metrics throughout your operations you won't be able to meet the end customer expectations. Meaning: you also need to control your suppliers and have indicators throughout your Value Chain. 

Aligning on the Customer metrics is certainly a great concept but for sure not effortless to achieve. We all know the traditional KPIs related to the Customers performance measurement which are part of the S&OP (Sales and Operations Planning) or IBP (Integrated Business Planning) processes, such as:

  • On-Time in-Full
  • Demand/Forecast accuracy
  • Actual versus Planned Sales
  • Missed Sales
  • Stock-outs
  • etc… 

But are those KPIs really the right measurements?

How can we define metrics to understand customers' situations, perceptions, and expectations. This is where you need to work cross-functionally to place YOUR CUSTOMER and not your product at the center of interest. Then you can design, adapt and shape your supply chain KPIs to reflect on your own strategy.

At the same time do not forget to include your Suppliers and CDMOs (Contract Development Manufacturing Organizations) in the journey. Your partners will be the tactical enablers of your performance.  It would be best to also design new sets of KPIs to complement and strengthen the overall qualitative assessment of your cross-functional performance.

Happy Customers

The journey of supply chain performance excellence, fully integrated into your company performance goals, needs paramount attention and constant monitoring. Dedicated & cross-functional teams should be established to drive, anticipate and deliver the right and SMART metrics which can be used at all levels of your organization. Good luck again in this second and most important journey.

Fell free to contact us, for a deeper understanding on how our supply chain excellence experts can support you.