Strategic Supply Chain Management - Supply Chain Online

5C H A P T E R
Core Discipline 5:
Use Metrics to Drive
Business Success
Most people agree with the adage, “If you can’t measure it, you can’t fix
it.” Yet few metrics programs actually provide a clear picture of overall
performance, pinpoint the root of performance problems, or identify
improvement opportunities. The reason is simple: Establishing a robust—
and useful—performance measurement program is difficult! Just getting
agreement on what to measure, how to define the chosen metrics, and how
often they should be measured can be a major effort. And getting management
to agree on the fundamental purpose of a metrics program can be
the most contentious activity of all.
Think about the metrics your company uses to determine its operational
health. Like many companies, you may have functionally focused
scorecards for customer service, purchasing, and manufacturing already in
place. Few companies, however, track cross-functional supply chain metrics,
even though actively monitoring these metrics for management purposes
is a key component of an integrated supply chain organization (see
Chapter 3).
Most corporate metrics focus on financial impact and outcomes. This
isn’t surprising because financial reporting must be done on a regular basis.
Financial metrics are also relatively easy to obtain once the books are closed
for any given period. Moreover, regulations such as the Sarbanes-Oxley Act
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