SCM Ch. 13 - SC Performance
Measurement and Financial Analysis
questions with answers.
Measure vs. Metric vs. Index ANS -Index:
✱Combines two or more metrics into a single indicator, usually used to track trends in the output of a
process.
✱ Logistics example: Perfect order
Metric:
✱Involves a calculation or a combination of measurements, often in the form of a ratio.
✱ Logistics examples: Inventory future days of supply, Inventory turns, Sales dollars per stock-keeping
unit
Measure:
✱Requires no calculations and with simple dimensions.
✱Logistics examples: Units of inventory, Backorder dollars
Characteristics of Good Performance Measures ANS -1) Is quantitative
2) Is easy to understand
3) Encourages appropriate behavior
4) Is visible
5) Is defined & mutually understood
6) Encompasses outputs & inputs
7) Measures only what is important
8) Is multidimensional
9) Uses economies of effort
10) Facilities trust
, Successful Development of a Supply Chain Metrics Program ANS -- Is a result of a team effort
- Involves customers and suppliers (where appropriate)
- Develops a tiered structure
- Identifies metric "owners" and ties metric goal achievement to an individual's or division's
performance evaluation.
- Establishes a procedure to mitigate conflicts
- Is consistent with corporate strategy
- Establishes top management support
Performance categories ANS -1. Process measure categories
2. SCOR Level-1 metrics
3. Logistics Quantification Pyramid
Process measure categories ANS -The three major process categories that provide a useful way for
examining logistics activities performance include, time, quality, and cost.
1. Time:
✱ On-time delivery/receipt
✱ Order cycle time
✱ Order cycle time
variability
✱ Response time
✱ Forecasting/Plan
ning cycle time
2. Quality:
✱ Overall customer satisfaction
✱ Processing accuracy
✱ Perfect order
Measurement and Financial Analysis
questions with answers.
Measure vs. Metric vs. Index ANS -Index:
✱Combines two or more metrics into a single indicator, usually used to track trends in the output of a
process.
✱ Logistics example: Perfect order
Metric:
✱Involves a calculation or a combination of measurements, often in the form of a ratio.
✱ Logistics examples: Inventory future days of supply, Inventory turns, Sales dollars per stock-keeping
unit
Measure:
✱Requires no calculations and with simple dimensions.
✱Logistics examples: Units of inventory, Backorder dollars
Characteristics of Good Performance Measures ANS -1) Is quantitative
2) Is easy to understand
3) Encourages appropriate behavior
4) Is visible
5) Is defined & mutually understood
6) Encompasses outputs & inputs
7) Measures only what is important
8) Is multidimensional
9) Uses economies of effort
10) Facilities trust
, Successful Development of a Supply Chain Metrics Program ANS -- Is a result of a team effort
- Involves customers and suppliers (where appropriate)
- Develops a tiered structure
- Identifies metric "owners" and ties metric goal achievement to an individual's or division's
performance evaluation.
- Establishes a procedure to mitigate conflicts
- Is consistent with corporate strategy
- Establishes top management support
Performance categories ANS -1. Process measure categories
2. SCOR Level-1 metrics
3. Logistics Quantification Pyramid
Process measure categories ANS -The three major process categories that provide a useful way for
examining logistics activities performance include, time, quality, and cost.
1. Time:
✱ On-time delivery/receipt
✱ Order cycle time
✱ Order cycle time
variability
✱ Response time
✱ Forecasting/Plan
ning cycle time
2. Quality:
✱ Overall customer satisfaction
✱ Processing accuracy
✱ Perfect order
