Performance
Performance in the supply chain refers to how effectively a company or a system executes its tasks in relation to goals such as quality, delivery, cost, and flexibility. It is used to measure and improve processes across the entire supply chain.
What is Performance?
Performance is often measured through KPIs (Key Performance Indicators), which can include on-time delivery, turnover rate, tied-up capital, production output, error rate, or customer satisfaction. It provides an objective basis for assessing efficiency and identifying areas for improvement.
What is Performance used for?
Performance is used to:
- Assess the efficiency of processes, products, and employees
- Identify bottlenecks or inefficient processes
- Optimize resource utilization and tied-up capital
- Improve customer service and competitiveness
When is Performance monitored?
Performance is used continuously for:
- Monitoring supply chain and production processes
- Strategic planning and decision-making
- Benchmarking against industry standards or internal goals
- Continuous improvement projects
How is Performance measured?
Performance is measured by defining relevant KPIs and comparing the results against the target.
Examples are:
- On-time delivery (%)
- Inventory turnover (times per year)
- Average lead time
- Tied-up capital in inventory
- Error rate in production or logistics