Top 30 Supply Chain Metrics & KPIs and Analytics in eCommerce
The definition of supply chain and what it encompasses
A supply chain is a system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer. In essence, the supply chain is the process that turns inputs into outputs.
The term “supply chain” was first coined by an American economist in the early 1950s. At that time, it was used to describe the process by which businesses received goods from suppliers and delivered them to customers. However, over the past few decades, the concept of supply chain has been expanded to include all of the organizations and activities involved in moving a product or service from supplier to customer.
Today, the supply chain is often viewed as a network of organizations that work together to design, produce, deliver, and support a product or service. The purpose of this network is to create value for customers by providing them with the right product at the right time and place. To do this effectively, businesses must carefully coordinate their activities and resources with those of their partners in the supply chain.
The Supply Chain Council defines the supply chain as “the process from procurement through consumption by which goods and/or services are acquired and delivered to meet business objectives.” The term encompasses everything from purchasing raw materials to delivering the finished product to the end customer. It also includes all of the activities and resources required to move a product or service from supplier to customer. It includes transportation, warehousing, order processing, manufacturing, marketing, and customer service.
The Council’s definition highlights two important aspects of supply chain management: first, that it is a process; and second, that it involves more than just moving goods from point A to point B. In order for businesses to be successful in today’s marketplace, they must view supply chain management as a strategic process that encompasses all of the activities required to move a product or service from supplier to customer. Consequently, effective supply chain management must align with an organization’s overall business strategy.
An important thing to remember is that a company’s supply chain does not necessarily end with its customers. In many cases, customers are also part of the company’s supply chain because they provide input (e.g., feedback on products or services) that can help improve the company’s offerings. For example, a clothing manufacturer may use customer feedback to improve its designs or a restaurant may use customer input to develop new menu items.
In these examples, customers are playing an active role in shaping the company’s offering — they are not simply consuming what the company has produced. This highlights another important aspect of supply chain management: it is not just about moving goods from point A to point B; it is also about creating value for customers by giving them what they want or need (i.e., creating a demand).
Thus, they can see that supply chain management is a complex process that involves much more than just moving goods from suppliers to customers. It is a strategic process that encompasses all of the activities required to move a product or service from supplier to customer — and beyond — in order to create value for customers.
Why is supply chain important in eCommerce?
In the world of eCommerce, supply chain management is critical to a company’s success. By managing the flow of goods and materials, businesses can ensure that their products are delivered on time and in good condition. In addition, effective supply chain management can help to reduce costs and improve customer satisfaction. By streamlining the process of sourcing, manufacturing, and distribution, businesses can reduce waste and increase efficiency.
As a result, supply chain management is an essential part of any eCommerce operation. By working with experienced providers, companies can ensure that their products are delivered quickly and efficiently, while also reducing costs. In today’s competitive market, those who can master the art of supply chain management will be well-positioned for success.
Top Supply chain metrics and KPIs
Any business that plans to be successful needs to have a clear and concise understanding of their supply chain. This isn’t always as easy as it sounds, which is why Supply Chain & Logistics KPIs (Key Performance Indicators) were created. There are many different metrics that can be used to measure the performance of a company’s supply chain, but not all of them are equally important. The following is a list of 30 supply chain metrics and eCommerce KPIs that every business should track:
1. Inventory turnover rate
2. Percentage of on-time deliveries
3. Percentage of orders fulfilled on time
4. Order fill rate
5. Average days to fill an order
6. Vendor performance score
7. On-time payment score
8. Customer satisfaction score
9. Inventory accuracy rate
10. Cycle time
11. Lead time
12. Throughput time
13. Transportation cost per unit shipped
14. warehousing cost per unit stored
15. Stockout cost per year
16. Productivity index
17. Percent errors in inventory records per month
How to use analytics to improve your supply chain performance?
Most organizations today are keenly aware of the importance of supply chain performance. After all, the supply chain is responsible for delivering goods and materials to customers, and any disruptions can have a major impact on the bottom line. However, many organizations struggle to achieve optimal performance due to the complexity of the supply chain.
Fortunately, analytics can be a valuable tool for improving supply chain performance. By analyzing data such as customer orders, shipping schedules, and inventory levels, organizations can identify bottlenecks and inefficiencies.
In addition, analytics can be used to forecast demand, which can help organizations avoid stockouts and ensure that products are available when customers need them. By harnessing the power of analytics, organizations can take their supply chain performance to the next level.
Conclusion
The importance of supply chain in eCommerce cannot be overstated. A strong supply chain is essential for ensuring that products are delivered on time and in good condition. Furthermore, a well-run supply chain can help to reduce costs and improve customer satisfaction. In today’s competitive market, eCommerce businesses must therefore invest in efficient and reliable supply chain management systems. By doing so, they will be able to reap the many benefits that a successful supply chain can provide.
