HOW TO MEASURE SUPPLY CHAIN PERFORMANCE

22 | R i g h t S c o r e s ™ To get an idea of your own perfect order percentage, take the product of your performance in each area you define as making up perfect order performance. Formally, with P n the performance in one of n elements of perfect order performance, the perfect order percentage is computed as POP = ∏ ( n =1 to N) P n An example perfect order percentage computation is provided in Figure 2.x. There are many lessons in this little exercise. First, you may not even track performance in the nine activities described above. It is difficult to improve something that you don’t measure. Second, you may not recognize the interdependence of these logistics activities. They all contribute to the ultimate logistics objective of filling a customer order perfectly. In fact, the perfect order percentage can only be as high as the lowest performance in its composite elements. Third, you may not believe how low the number is. Most of our clients have a perfect order percentage lower than 50%. If you want to know why your customers always seem dissatisfied, that’s the reason. Imagine walking into your boss’s office and telling him or her that you got less than half the orders right last month. What kind of conversation would that be? (Very short and/or the last one.)