HOW TO MEASURE SUPPLY CHAIN PERFORMANCE

8 | R i g h t S c o r e s ™ by taking the geometric mean of sixteen miscellaneous factors. The result of Q, U, A, and X were added together to make the QUAX index. I asked him how many of their plants used the index. He explained that the index was used in all of their plants around the world. All I could say was, “That’s amazing.” One of the main reasons metrics programs are abandoned is a lack of trust in the metrics, the process, and/or the people. Trust is best established in metrics that are simple, understandable, and easy to explain. Alignment Several years ago the vice president of supply chain for one of the world’s largest auto companies called me. The conversation went something like this…. “Dr. Frazelle, our CFO is upset about inventory levels. He believes they are too high. What should we do?” I recommended what I almost always do in that situation. I recommended they determine their optimal turn and fill rates and establish the metrics, processes, and systems required to hit both targets. He said, “That sounds like good advice.” Three months later he called again. This time the conversation went something like this. “Dr. Frazelle, our dealer network is upset. They believe our fill rates are too low. What should we do?” I recommended that same approach – determine the optimal turn and fill rates and establish the metrics, processes, and systems required to hit both targets. He said, “That sounds like good advice.” Three months later he called again. The conversation went something like this,