HOW TO MEASURE SUPPLY CHAIN PERFORMANCE

E d w a r d H . F r a z e l l e , P h . D . dimension of measurement. Targets are the numerical goals. You can have a great metric and a terrible target and vice versa. Metrics Though there are many characteristics of effective measures, the most important that I have experienced in our consulting and research answer the following. • Are the metrics meaningful ? • Are the metrics controllable ? • Are the metrics readily comprehensible ? • Are the metrics aligned vertically, horizontally, and externally? • Are the metrics consistent ? • Do the metrics span the activities being measured? Meaningful Meaningful metrics are both memorable and relevant. During a recent visit to an automotive client I asked the vice president of supply chain how many metrics they used to monitor their supply chain performance. I don’t know why the number stuck with me, but it did. He proudly stated that they had 349 supply chain performance metrics and pointed to the six-inch thick notebook on the shelf behind him that had detail on each of those metrics going back for the prior five years. I wasn’t quite | 3

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