Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

1.4.5 Performance Indicators in the Target Area of Flexibility

Intended learning outcomes: Present the performance indicator bid proposal success rate, order success rate, breadth of qualifications, and temporal flexibility. Describe the SCOR indicators upside supply chain flexibility, upside supply chain adaptability, downside supply chain adaptability, and overall value at risk (VaR).


Examples of performance indicators in the target area of flexibility are the success rates in Figure 1.4.5.1 and Figure 1.4.5.2:

Fig. 1.4.5.1        The performance indicator bid proposal success rate.

Fig. 1.4.5.2        The performance indicator order success rate.

The performance indicators in Figure 1.4.5.3 and Figure 1.4.5.4 rather measure the past. In order to determine potentials, additional assumptions are required.

Fig. 1.4.5.3        The performance indicator breadth of qualifications.

Fig. 1.4.5.4        The performance indicator temporal flexibility.

The SCOR model contains the following performance indicators in the area of flexibility:

  • Upside supply chain flexibility: The number of days required to achieve an unplanned sustainable 20% increase in quantities delivered. The new operating level needs to be achieved without a significant increase of unit costs.
  • Upside supply chain adaptability: The maximum sustainable percentage increase in quantity delivered that can be achieved in 30 days. The new operating level needs to be achieved without a significant increase of unit costs.
  • Downside supply chain adaptability: The reduction in quantities ordered sustainable at 30 days prior to delivery with no inventory or cost penalties.
  • Overall value at risk (VaR): The sum of the probability of risk events times the monetary impact of the events for all the supply chain functions.

As performance indicators of the flexibility to enter as a partner in supply chains, the following are possible (see [HuMe97], p. 100):

  • Reduction of the company’s part in value-adding in the various supply chains.
  • The number of partners in a supply chain community and the turnover achieved by the supply community.

Additional performance indicators measure what has been achieved by the enabler objectives that were introduced in Figure 1.3.1.2. But as those are qualitative goals, it is generally not possible to calculate the degree achieved. Usually, a value is determined ranging from “insufficient” to “perfect.” See here [Hieb02].


Recap

The animations on the following pages show the performance indicators in the different target areas.
Click on the names of the indicators to get the accordant details.



Course section 1.4: Subsections and their intended learning outcomes

  • 1.4.4 Performance Indicators in the Target Area of Delivery

    Intended learning outcomes: Present performance indicator fill rate, also called customer service ratio, or OTIF (on-time and in-full). Identify the performance indicators delivery reliability rate, batch size or lot size, capacity utilization, value-added rate of lead time, variance in work content response time and order confirmation time.

  • 1.4.5 Performance Indicators in the Target Area of Flexibility

    Intended learning outcomes: Present the performance indicator bid proposal success rate, order success rate, breadth of qualifications, and temporal flexibility. Describe the SCOR indicators upside supply chain flexibility, upside supply chain adaptability, downside supply chain adaptability, and overall value at risk (VaR).

  • 1.4.6 Performance Indicators of the Primary Entrepreneurial Objective

    Intended learning outcomes: Present the performance indicator cash-to-cash cycle time and return on net assets (RONA).

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