Optimizing the supply chain

performance measures for the

supplier of steel polishing
components
- Presented by H.Barathwaj
(19MF01)
 Key performance indicators (KPI)
• KPI is a measurable value that demonstrates how
effectively a company is achieving key business
objectives.
• Organizations use KPIs to evaluate their success at
reaching targets.
• Each department will use different KPI types to
measure success based on specific business goals
and targets.
 Company Profile
• Name of the company: Jai Sai Traders
• Started: 2000
• Location: Vyasarpadi, Chennai:600039
• Components produced: polishing fibers, Mops, Soaps
• Major Clients: JVL Classic ware llb, M/S Shilpa
stainless steel pvt. ltd
• Company area (warehouse): 1200 Sq feet
Steel Polishing Components
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Measuring retail Emerald Insight 2015 KPIs helps in assessing the overall
supply chain visibility of supply chain processes
performance: which further assist in estimating
theoretical model the accuracy of supply/ demand
using key plan. The objectives of this paper
performance are to:
indicators (KPIs) 1. Identify key performance
indicators (KPIs) for measuring
Neeraj Anand Neha Retail Supply chain performance
Grover 2. To develop a theoretical
framework linking the
performance of identified KPIs on
financial performance of the firm.
Finally the theoretical framework
is proposed.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Developing Emerald Insight 2010 The purpose of this paper is to

environmental examine whether environmental,
supply chain i.e. green performance measures,
performance can be integrated within an
measures existing supply chain performance
framework, explore industry-
Sarah Shaw and recognized environmental
David B. Grant measure should look like, and
understand the direct benefits of
incorporating environmental
measures within a supply chain
performance framework. This
paper provides insights into
developing a green SCPM
framework.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Benchmarking the Emerald Insight 2018 The purpose of this paper is to

interactions among explore the key performance
performance indicators that serve as a decision
indicators in dairy support tool in case of dairy
supply chain: an ISM supply chain practices and to
approach analyze their interactions in the
context of Indian dairy industry
Rahul S Mor, Arvind sector. A total of eleven PIs have
Bhardwaj, Sarbjit been identified through the
Singh, literature review and the opinions
of an expert team consisting of
managerial and technical experts
from dairy industry and
academics. Interactions among
PIs are evaluated with the help of
the ISM matrix.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Developing key Emerald Insight 2009 Measuring supply chain

performance performance reveals the gap
indicators for supply between planning and execution
chain: an industry and helps companies to identify
perspective potential problems and areas for
improvement. However, it is
Bongsug (Kevin) recognized that developing key
Chae performance indicators (KPIs), or
metrics, is very challenging and a
set of practical guidelines is not
readily available for companies
and supply chain management
(SCM) practitioners. This paper
seeks to offer a practical
approach to performance
measurement and to present a
list of essential KPIs.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Exploring the key Emerald Insight 2018 The issue of food security is one
performance of the critical global challenges.
indicators of green The Government and the
supply chain industries have begun
management in apprehending the importance of
agro-industry green supply chain management
implementation in their supply
Bhaskar Gardas, chains. There are various
Rakesh Raut, performance indicators of Green
Annasaheb H. supply chain management in the
Jagtap, Balkrishna agro-sector. This paper aims to
Narkhede analyze 14 PIs using an
interpretive structural modeling
(ISM) approach.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Automating the Emerald Insight 2007 This paper aims to automate the
construction of supply chain operations reference
supply chain key model as an enabler for process-
performance oriented supply chain business
indicators intelligence. In order to achieve
the benefits from the SCOR
Thomas Gulledge model, effective business process
and management and the SCOR KPIs
Tamer Chavusholu must be implemented and used.
Unless data collection to support
KPI construction is automated, it
is difficult to institutionalize the
SCOR model as a measurement
and benchmarking framework.
The author have demonstrated
that automated support for KPIs
is feasible and achievable.
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Evaluating the key Emerald Insight 2018 Research on KPIs for SCIS
performance implementations has been scarce
indicators for supply and fragmented. A better
chain information understanding of these KPIs allow
system supply chains to increase their
implementation chances of successful
using IPA model implementation of SCIS. A
significant research is found to
Kunal Ganguly, identify the KPIs in Enterprise
Siddharth Shankar Resource planning (ERP) system
Rai, implementation. The resulting
framework can be useful to both
academicians and practitioners to
provide a platform for proper SCIS
selection and implementation
and also encourage further
research in the field of SCIS
 Literature Review
TITLE AND AUTHOR JOURNAL YEAR MAJOR CONCLUSIONS

Determining and Emerald Insight 2016 The purpose of this paper is to

applying sustainable introduce a methodology to
supplier key identify sustainable supply chain
performance key performance indicators (KPI)
indicators that can then be used for
sustainability performance
Chunguang Bai evaluation for suppliers. The KPI’s
Joseph Sarkis determined results provide
insight into relative performance
of suppliers. The supply chain
sustainability performance results
from both the neighborhood
rough set and Data envelopment
analysis can be quite sensitive
parameters selected and
sustainability KPI sets that were
determined.
 Problem Definition
• The Supplier of the steel polishing industry faces the
financial loss due to the increased cycle time in
replenishment order of the inventory of steel
polishishing components from the manufacturer to
his warehouse because of delayed transportation of
the components.
 Objective
• To select the process parameters (performance
indicators) that will affect the cycle time per
component.
• To address the loss incurred with replacement of the
suitable performance measure in action.
Supply Chain Metrics for Data Driven Leaders

“Give your data purpose so you can effectively manage

your supply chain metrics”
 Manufacturing is the backbone to most of what we take for
granted. But as anyone working in the manufacturing industry
knows, there is a lot of work that goes into ensuring
everything goes smoothly.
 Managing all the moving parts in your supply chain can be a
logistical nightmare unless you have access to the right KPIs
and metrics. We need to track the current status of
shipments, monitor inventory levels and ensure that all orders
you ship are completely accurate.
 Supply Chain Metrics(KPIs)
1) Percentage of out of stock items
2) Inventory turn over
3) Inventory accuracy
4) Carrying cost of inventory
5) Supplier on-time delivery
6) Inventory to sales ratio
7) Rate of return
8) Perfect order rate
9) Back order rate
 Data collection:
• Cost of one component = Rs 200
• Average no of items out of stock per month = 12,244
• Average no of items in Inventory per month = 12,932
• Average no of items spoiled per month = 20
• Average no of components reworked per month = 460
• No of employers = 1
• Salary for employer = Rs 10000
• Rent for the warehouse = Rs 8000
 Percentage of out of stock items

The Percentage of Out of Stock Items KPI measures the

number of items that are out of stock at the time a
customer places an order. It measures your ability to meet
customer demand, a key aspect of running a successful
supply chain business.
 Inventory turn over

• The Inventory Turnover KPI measures how many times a year

your organization is able to sell its entire inventory.
• To calculate inventory turnover, use the following formula:
Cost of Goods Sold ÷ Average inventory
 Inventory Accuracy
The Inventory Accuracy KPI compares the accuracy of your
inventory by taking a headcount of items in stock and comparing
it to what's recorded in your database. This KPI requires you to
perform a headcount of inventory to ensure that your
bookkeeping and data management practices are in order.
Inaccurate inventory tracking can result in higher costs, poor
order accuracy rates, and decreased customer satisfaction.
 Carrying cost of inventory

Measure how much it costs to carry inventory.

Success indicators
– Low costs and high inventory turnover rates.
 Supplier on-time delivery

• The On-time delivery performance refers to the ratio of

customer order lines shipped on or before the
requested delivery date / customer promised date versus the
total number of order lines.
• OTD is simply measured as a ratio of the number of units
on time divided by the number of total units shipped on a
monthly base.
 Inventory to sales ratio

• Measure the amount of inventory you are carrying compared

to the number sales order being fulfilled.
 Rate of return

• Measure the rate at which shipped items are returned to you.

 Perfect order rate

The Perfect Order Rate KPI measures how many orders you ship

without incident, where incidents are damaged goods,
inaccurate orders or late shipments. Attaining a high perfect
order rate should be the goal of every supply chain organization
as it indicates organizational efficiency and high customer
satisfaction.
 Back order rate

The Back Order Rate KPI measures how many orders cannot be

filled at the time a customer places them. A high back order rate
means your customers are forced to wait while you attempt to
fill their order, which will adversely affect customer satisfaction
and retention in the long term. Monitor this KPI to identify why
certain items are not in stock and to deal with trends (such as
seasonal demand) that may affect your performance
9KPIs
 Conclusion
Thus by analysing with all the performance measures,
the overall cycle time of supplying the steel polishing
components requires a better demand forecast, so as a
result of this the overall cycle time could be possibly
reduced to a minimum
 References
• Neeraj Anand Neha Grover. “Measuring retail supply chain
performance: theoretical model using key performance indicators
(KPIs).” Benchmarking: An International Journal, Emerald
Insight(2015)
• Sarah Shaw and David B. Grant. “Developing environmental supply
chain performance measures.” Benchmarking: An International
Journal, Emerald Insight(2010)
• Rahul S Mor, Arvind Bhardwaj, Sarbjit Singh. “Benchmarking the
interactions among performance indicators in dairy supply chain: an
ISM approach.” Benchmarking: An International Journal, Emerald
Insight(2018)
• Bongsug (Kevin) Chae. “Developing key performance indicators for
supply chain: an industry perspective.” Benchmarking: An
International Journal, Emerald Insight(2009)
 References
• Bhaskar Gardas, Rakesh Raut, Annasaheb H. Jagtap, Balkrishna
Narkhede. “Exploring the key performance indicators of green
supply chain management in agro-industry.” Benchmarking: An
International Journal, Emerald Insight(2018)
• Thomas Gulledge and Tamer Chavusholu. “Automating the
construction of supply chain key performance indicators.”
Benchmarking: An International Journal, Emerald Insight(2007)
• Kunal Ganguly, Siddharth Shankar Rai. “Evaluating the key
performance indicators for supply chain information system
implementation using IPA model.” Benchmarking: An International
Journal, Emerald Insight(2018)
• Chunguang Bai Joseph Sarkis. “Determining and applying
sustainable supplier key performance indicators.” Benchmarking: An
International Journal, Emerald Insight(2016)
THANK YOU