QUALITY & METRICS
A Metrics Culture Drives Better
Performance
Leading companies have a portfolio of true end-to-end supply chain metrics, use those metrics
in key processes such as S&OP, supplement the metrics with customer and supplier dashboards,
and have an open attitude and metrics culture that drives them through an upward spiral of
increasingly higher levels of performance. Most importantly: they understand they cannot be
good at everything, and they consciously manage tradeoffs.
—Debra Hofman, vice president at AMR Research
ompanies are still trying to figure out which are the
metrics that matter, how to get everyone to agree
on standard definitions, and how to turn the numbers into something actionable.
C
supplier and customer scorecards;
• Embed and use the metrics portfolio in a critical process
such as S&OP, with different levels of detail provided for different
key stakeholders;
This year, we saw more emphasis on financial supply chain
• Actively shape an attitude and metrics culture that is open to
metrics, such as working capital and cash-to-cash. We also continually rooting out problem areas and improving them,
saw an increased focus on the demand forecast metric as com- avoiding the politics, agendas and personal blame;
panies look to better sense the anticipated upswing. Only a
• And most importantly, understand they cannot be good at
handful of companies are successfully tracking the full perfect everything—they identify what they must be great at, and use the
order and total end-to-end supply chain cost, and where they metrics to make conscious tradeoffs for everything else.
are, it tends to be in pockets of excellence rather than company-wide. Finally, there’s been an uptick in interest from life
The Outlook
sciences companies on the topic of metrics, as pressures on We expect this year to be one of continuing evolution. The
margin and cost in that value chain heat up.
majority of companies are still in the early stages of maturity
AMR Research’s annual Supply Chain Top 25 ranking highlights when it comes to metrics, as they strive to get a better handle on
supply chain leadership. In the area of metrics, the best companies: their global supply chain performance. The next stage is to ele-
• Have a portfolio of end-to-end supply chain metrics at the vate the metrics from supply chain to value chain, where compa-right level that cross procurement, manufacturing, distribution, nies will apply the metrics that matter to guide collaborative,
transportation, and customer service; these are supplemented by win-win activities with their trading partners.
