Key Metrics for Manufacturing in Supply Chain Management
Supply chain management is a challenging area of business for manufacturing companies. A well-run manufacturer must find a healthy balance of communication, logic, and execution in order to ensure that their supply chain is running smoothly. There are many metrics that these organizations can use to evaluate their performance. Here are some of what we believe are the most important metrics for a supply chain’s success.
Perfect Order Fulfillment
This is a discrete measurement that essentially shows the percentage of orders that are fulfilled without any errors. A perfect order is one that sees the right product being delivered to the right place at the right time in the right condition. By constantly working to improve perfect order percentages, manufacturers show that they are working in the best interests of their customers.
Customer Order Cycle Time
This metric measures the average time that it takes to fulfill a customer delivery after a purchase order has been received by the manufacturer. This is an important metric to analyze the efficiency of your supply chain, as it shows how well different departments work together to complete a job after a customer makes a request.
Freight Cost per Unit Shipped
This calculation involves dividing the total freight costs incurred by the number of total units shipped. Generally, these are calculated over a certain period of time, e.g. weeks, months, quarters, or years. It’s important to compare this to the total cost of producing individual units, since each time product breaks during shipment means your company will have to manufacture a replacement.
On Time Shipping Rate
This metric is the percentage of items or order value that arrives on or before the requested ship date. The On Time Shipping Rate is the key to customer satisfaction. A high rate indicates an efficient supply chain. The more accurately your supply chain can get the product into customer’s hands, the happier they will be, and that will build long-lasting trust between you and your customer.
We hope that we provided some insight into how you can measure the performance of your supply chain management. Our goal is to be as efficient as possible while keeping our customer as our number one priority. To learn first hand how we do this with each shipment, start today with Zip Xpress.