Executive interest in performance metrics is high, yet companies often don’t achieve the results they want. One of the most common causes is that companies are not taking a holistic view of performance and harmonizing metrics across all of their functions – often treating manufacturing and distribution as separate “functional silos”. As a result, people in each function work to optimize performance against core metrics or key performance indicators (KPIs) they are responsible for in just one facility. The result often is that a company’s internal supply chain has conflicting goals and metrics, such as keeping inventory low in the inbound warehouses but asking plants to be ready to ramp up to meet demand on an array of different products quickly. Unfortunately, when core functions such as inbound materials, production, and outbound distribution are not working in harmony, overall company performance suffers.
Date Published: January 2009
- Julie Fraser, Cambashi, MESA;
- Karl Manrodt, Ph.D., George Southern University,
- Kate Vitasek, Supply Chain Visions