Performance Management in Supply Chain & Operations 

Performance Management in Supply Chain & Operations 

Today, material planners, customer order managers, and professionals outside supply chain departments can easily prioritise their daily operations by using cross-functional supply chain information.

However, according to a Deloitte survey, there are two sides of trade-offs which will greatly affect the developments and should be the focus on professionals and supply chain managers.

First, with the help of new technologies, companies can coordinate and manage their network better and more efficiently. Analysing value chain activities to identify performance deviations and irregularities have become easier and are based on more information than in the past. 

See also: Restarting & Synchronising Supply Chain with the New Normal

Second, the real-life use cases and the increasing application of industry 4.0 technologies are transforming supply chains across multiple industries towards digital supply networks. The technology is already there and has hit the ground. It affects all areas of the value chain, the established supply chain and operations processes, as well as the metrics a company utilizes. 

Proven approaches to supply chain performance management need to be rethought to cope with increasing customer requirements, technological advancements, and ongoing challenges in supply chain complexity and pressure to increase revenues and profit margins. 

Key elements to supply chain management 

Supply chains comprise the flow of products, information, and money. How they are managed greatly affects an organisation’s competitiveness and profitability. Proper alignment with the business strategy is essential to ensure strong overall performance. Thus, the key elements to be considered should include all the following points: 

  • Supply chain strategy 
  • Organisation
  • Planning
  • Management
  • Control activities 

The combination of those elements fills the gap between business’ decision-makers and IT systems for performance measurement with data structures and reporting tools. They can also be a bridge between directives and successful execution by using available information to street supply chains from an end-to-end perspective. 

Optimising end-to-end value chain 

Supply chain transparency is key and companies are increasingly developing one-stop-shops for supply chain information and reporting. Owing to this reason, integrated performance management is needed and should be focused on the following points. 

  • A common understanding of supply chain objectives and disciplined target-setting
  • Goal-oriented information on target achievements to all relevant stakeholders and the addressing of key messages to executives, managers, and professionals
  • Supply chain transparency by considering and aligning supply chain processes and technology with an organisational structure 
  • Aligned and agreed-upon supply chain metrics covering all perspectives in supply chain management and also process performance to enable root cause analyses in the event of deviations
  • Integrated technical solutions for the gathering of information and distribution of reports covering the full cycle from planning to reporting to intervention
  • A flexible enterprise data warehouse and adaptability of metrics, reports, and layouts 

Finally, standardised processes and metrics are prerequisites for realising such advanced integration. These include:

  • Planning details throughout the entire sales and operations planning process 
  • Customer service levels 
  • Accuracy of current inventories 
  • Transparency of supply chain costs 

Read also: 4 Core Supply Chain Capabilities

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