It is ideal to automate various supply chains processes like logistic planning, production machinery, and scheduling and make them operate by themselves. Things could go off track in various ways, they won’t be frequent, but you need to constantly monitor and evaluate various SC processes and operations. Today, we’ll discuss supply chain monitoring; its various KPIs and metrics, and its benefits.
What is Supply Chain Monitoring?
Supply chain monitoring is the process of evaluating and analyzing various SC operations, suppliers, employees, and customers and tracking the flow of goods and products throughout your SC network. Businesses and companies employ various SC monitoring and evaluating tools, and they offer you real-time updates about various activities happening in the SC network.
Additionally, SC evaluating tools and software allow you to recognize the gaps in your SC network and take the necessary steps to resolve them. They would also inform you if there are any threats or security breaches to your business operations
KPIs & Metrics Categories for Supply Chain Monitoring
Some of the main categories of KPIs and metrics for supply chain monitoring are as follows;
There are various tools and applications available for demand planning and forecasting, MAPE and Mean Absolute Percentage Error are great tools among all of them. Some of the key features and functions of MAPE software are as follows;
- Insight into the functional accuracy of the demand forecast
- Offers you a snapshot of SC and operational processes
Inventory Carry Rate
It is significant to know the inventory occupying space in the warehouse by taking your valuable time and space; it is delaying the order processing of final delivery. Inventory Carry Rate is a great evaluating tool, it would help you to analyze your warehousing cost. However, the dormant inventory occupying space tells you the performance of your warehouse, keeping track of your inventory, and analyzing the efficiency of your operations.
Order Cycle Time
Order Cycle Time is a great tool that helps you to record the time when customers place an order and when they actually receive it on their doorsteps. Of course, there are some variations because the location of every customer would be different, and different companies are analyzing time differently. Therefore, it is significant to establish your measures and metrics and they would allow you better control over your production facility.
Perfect Order is a great tool that helps you with a quick snapshot and overview of the overall performance of your production and manufacturing facility. These tools allow you to place perfect orders and some of their features are as follows;
- Timely delivery
- No missing items
- No re-orders
Benefits of Supply Chain Monitoring
Some of the main benefits and advantages of supply chain monitoring are as follows;
One of the great impacts of monitoring and evaluation; it spreads information across various SC processes and touchpoints. When it comes to planning, then you don’t have to collect random and unorganized data from various perspectives. It offers you the following information and insight at your fingertips;
- Projections and forecasting
- Wide range of coverage
You can employ real-time and updated information and apply it in your scheduling and planning. When SC notifications are working or turned off, then you do the following;
- Visualize the automated value chain impact of different decisions
- Choosing the best and optimum result
- Letting the evaluating tool create new plan and establish new goals and objectives
- Making fast and smart decisions
- Limited delays to the premium freight
Avoiding Bottleneck Issues
You can visualize and imagine the needs and significance of the supply chain planning relevant to the workflow of sourcing and inventory to decrease the stockouts. It allows you to recognize and avoid bottlenecks, decrease the cost, and make timely delivery. Along with showing SC utilization for the production flows, it helps you in the following ways;
- Offers you key insight for the entire SC network
- Provides you with resources to recognize potential issues
- Automatically comparing various planning scenarios continuously
- Promotes transparency and visibility
- Minimize disruptions
Limited Buffer Stock
If you convert monitoring and evaluation activities smarter with management and active planning, then you would observe things differently. For instance, you won’t have to utilize your buffer stock more frequently, and it is not just a mere coincidence.
- Comprehending what is happening at every touch point
- Decreasing the frequency of unexpected occurrence
- Making your SC processes and activities leaner
- Initiate with buffer stock
- Real-time evaluation helps you to decrease the buffer stock without any potential risks
- Reduce your capital commitment continuously
If you integrate the IT system with your suppliers, then it allows you to beware of the SC activities; ultimately, it decreases the risk of stocks. It is because you are constantly monitoring and evaluating the SC needs relevant to the sourcing realities and inventory level. For instance, if you don’t have access to the real-time evaluation of the SC activities, then you depend on the quarter resupply of orders either monthly or quarterly.
Effective and efficient SCM and evaluation depend on gathering information about the flow of material and goods. The more information you have got about your and your suppliers’ inventory and customers’ demands, the more it allows you to maintain the balance between overly lean inventory that poses the risk of stockouts and costly buffer stock.
Conclusion: Supply Chain Monitoring
After an in-depth study of the supply chain monitoring; we have realized that SC evaluation is highly significant for the growth of business and achieving cost efficiency. If you are learning about the SC evaluation, then you should keep in mind the abovementioned metrics, KPIs, and benefits.
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