3 Essential Tips for Measuring Supply Chain Efficiency
By Allegiance Staffing
April 13, 2021
If you are managing a supply chain, you have quite a lot to keep track of. And, with all of the additional moving pieces that the pandemic has dealt this industry, it’s imperative that your supply chain efficiency is at its best.
There are many ways to go about measuring your efficiency, so the best place to start is by figuring out which metrics you need to prioritize and how they will be used to accomplish your specific goals. Here are some things to keep in mind to help you come up with a solid plan of attack for supply chain efficiency in 2021.
Supply Chain Efficiency Strategies
The best way to create a solid performance plan is to start by measuring what is currently working, what isn’t, and the issues that may come up down the line. With that information, you can then decide what needs to be done to repair issues and increase productivity. Here are the 3 essential areas to focus on and some good examples of how to navigate each.
1. Determining Your Goals
In order to establish what tools you need and how to use them, you’ll need to know your goals. Some things to think about as you come up with this list are:
- Financial benchmarks
- What a “perfect order” looks like
- Staffing needs and performance expectations
2. Measuring Performance
With the right tools and strategies in place, you will be able to gather the metrics you need to keep your company on track. As you collect these tools, see if you can get some training on how to use them to their full capacity. Some examples of tools and strategies to consider using are:
- Using The Logistics Scoreboard. This tool helps supply chain managers measure the overall business value of supply chain management. Laid out as a spreadsheet, you will be able to track expenses, investments, asset value, and the overall return on those assets. It can also be used to measure time, quality, and productivity metrics.
- Economic Value Analysis (EVA). EVA is used to measure the long-term shareholder values of the business. This method is often used as a contributor to the logistics scoreboard to help assess supply chain performance.
- Activity-Based Costing (ABC). As the supply chain has many different levels and phases of activity, it’s helpful to assign costs to each of these in order to get the full financial picture. This allows you to attach each financial measure to your operations and determine effectiveness.
- Balanced Scorecard. This approach tracks customer activity, cost and financial status, internal business errors, training, and product development.
3. Devising a Plan
Now that you know your goals and the tools you’re going to use to accomplish them, you can delegate who is responsible for carrying out what. Set dates in your calendar for when you will follow up on initiatives and goals so you can adjust the plan as needed.
The pandemic made it clear that there are certain things you cannot predict, but that doesn’t mean you cannot build up your resilience so you’re ready to act when disaster strikes. As you implement measurement tools, include these strategies so you can be as ready as possible for the next curveball:
- Get to know your suppliers well, including Tier 2 and Tier 3 suppliers.
- Make sure your sourcing strategy is solid.
- Ramp up your customer service game by taking a close look at how you are engaging them and remaining attentive to their needs.
- Stay focused on visibility by eliminating data silos and bottlenecks and building track-and-trace capabilities.
- Staff up and make sure everyone is fully trained on your processes, policies, and goals.
You can have the greatest analytical tools and new plans to up your game, but they will be obsolete without a solid staff to follow through. Allegiance Staffing has over 20 years of experience staffing businesses in multiple industries all over the United States. As seasoned experts in staffing the supply chain, we can provide you with team members that will support you in your efforts to remain efficient and productive.
To learn more about our staffing services, give us a call today!