You have reached our fourth and final blog in the series about using metrics to avoid a performance black hole. If you missed our previous blogs, you missed learning how the supply chain, process improvements, and metric hierarchies affect your return on investment (ROI).
Supply chain management has many facets, and each business unit should have individual performance goals that contribute to the bottom line of the company. Problems arise when important high-level business goals aren't communicated clearly throughout the supply chain, leaving department goals misaligned with the goals of the company as a whole.
Here, we explore how goal alignment affects ROI.
Departments Can’t Act Alone
Each business unit has their own metrics to gauge operational performance; while this is important, it's ultimately more important to ensure that the goals of each business unit are aligned with your overarching business goals. A department that is efficient, effective, and meeting its metrics isn't useful if it isn't contributing to the good of the company.
Common business goals include:
- Order accuracy – getting the right orders to the right customers
- Cash flow – the time between ordering materials and being paid by the customer
- Cycle time – the speed at which materials are sourced through filling customer orders
- Inventory turns – how many times inventory is cycled annually
- Collection – how quickly you receive payment for goods and services
Use a top-down approach to develop your supply chain metrics. Decide what the most important company objectives are – on-time shipment, customer satisfaction, cost reductions, etc. – and then establish a corresponding metric hierarchy to measure results and progress. Then, make goals well known via good communication across departments.
Consulting with Experts for Business Goal Alignment
Southeast Computer Solutions can help your business identify processes with the highest potential for alignment with stated company goals. With those processes identified, we'll then help you implement sophisticated software applications that leverage technology to meet those goals. Contact us today to see how our business knowledge and technical expertise can benefit your company.
About Southeast Computer Solutions
Southeast Computer Solutions is based in Miami, Florida, and has additional operations in Mexico. For over 30 years, we have positively impacted the success of small and mid-sized businesses with effective business management implementations that improve our clients’ operations. We listen, we are accessible, and we care. Learn more by visiting our website or calling 305-556-4697.