Archive for Metrics and Standards

No Industry Has A Better Success Metric than Baseball

Baseball has a key performance indicator that is unrivaled. The Wins Above Replacement Value tells a team exactly what they need to do to succeed. In business, and the supply chain realm, no other success metric has this clarity.

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A Critical Fulfillment Metric: The Perfect Order

The perfect order metric (POM) is one of the most critical metrics in fulfillment. The Warehouse Education and Research Council’s (WERC) definition of the perfect order metric is that a perfect order is delivered: Complete; On time; Damage free; And, with the correct documentation and invoicing. This is tough to achieve a very high POM number because the final formula is based on multiplying the sub metrics together. So if the orders delivered in a […]

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Uncertainty in the trucking industry heralds changes coming for shippers

In the spring of 2013, TMW Systems released the results of a survey involving over-the-road, long-haul truckload carriers. Operating in one of the most competitive segments of the trucking market, truckload also represents the core business of most diversified transportation service companies. As we approach the release of the 2014 version of the TMW survey, we thought it might be interesting to revisit the key findings from the prior study and examine how things have […]

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The Problem with Big Data

…is the same problem that has always existed with data: it is often wrong, outdated, or incomplete. Whenever I ask supply chain professionals, “What was the most difficult and time-consuming part of your software implementation project?” the answer I get is almost always the same: collecting and cleaning the data. This was true fourteen years ago when I first started asking the question, and it’s still true today. Several years ago, I interviewed ten CIOs […]

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DC Managers: Use the Right Kind of Metrics to Protect Your Job

ARC Advisory Group surveyed 52 logistics executives and asked them if their companies were using any sort of warehousing costs per unit measurement, defined as “total warehousing costs/total units shipped.” Thirty-seven percent of the respondents were not using this this metric type, which is far too low. Ideally, if a company is doing pallet shipments, it would measure “cost per pallets shipped” to evaluate that zone of the warehouse; if it is building mixed-case pallets, […]

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Guest Commentary: The Importance of a Service Level Scorecard with Your 3PL

Is your company getting ready to sign an agreement or renew a contract with a third party logistics provider (3PL) or continuing a partnership with an existing 3PL partner? If so, do you have a service level agreement in place which clearly spells out key performance indicators (KPI’s) for your 3PL and do you review it regularly? If you are using a third party logistics provider, then measuring their effectiveness is critical to determine if […]

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Moneyball Logistics

I read the book “Moneyball” by Michael Lewis and loved it. It was about how the Oakland Athletics, a baseball team with a small payroll, bucked conventional thinking and made themselves a consistent playoff team in the late 1990s and early 2000s while competing against much wealthier teams with much larger payrolls. Their ability to win was based on a form of statistical analysis invented by Bill James. In short, this book put math in […]

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Keeping SCOR of Your Supply Chain

I recently attended the Sales & Operations Planning Innovation Summit organized by the IE Group. One of the first speakers and moderator for the first day’s sessions was Rich Sherman, Director North America of the Supply Chain Council. Rich’s presentation made me realize that it’s been a long time since I  last wrote about the Supply Chain Council and that I was not up to date on some of the new enhancements made to its “Supply Chain […]

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A Monsanto Plant Tackles Manufacturing Risks

Process manufacturing plants have distributed control systems (DCSs) that are connected to plant floor sensors that monitor pressure, heat, temperature, etc. These sensors are used to regulate processes. For example, flow measurements can be transmitted to the DCS; when the measurement reaches a certain point, the controller instructs a valve to open or close. These sensors can also generate alerts if measurements fall outside desired parameters. These alerts are a key part of supply chain […]

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The Perfect Order Metric is Not Sufficient

The Perfect Order is often recognized as the highest level of customer service. It can be defined in different ways, but the traditional definition includes four elements: order completeness, timeliness, condition, and documentation. In other words, to be considered perfect, an order must be delivered to the customer’s distribution center (DC) complete, on time, free of damage, and accompanied by the correct invoice and other documentation.  Achieving strong performance on the perfect order metric is […]

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