How Supply Chain Affects ROI

This is the first of a series of four blogs about the best ways to use metrics to improve your business processes. Please check back in the coming weeks to read the whole series.

Your business relies on the consistent performance of its supply chain organization. The efficient flow of goods – starting with deliveries from suppliers, moving through your warehousing and distribution processes, and only ending when the goods are shipped out to customers – is critical to cost control, customer satisfaction, and consistent profitability.

But do you know how efficient your business's supply chain is? How about how supply chain affects ROI? It's likely that at least small improvements are necessary to increase efficiency, reduce costs, improve profits, and boost customer satisfaction.

How do you determine the efficiency of your supply chain? You use metrics, which are tools for measuring performance.

How Can Using Supply Chain Metrics Add to Your ROI? 

You can objectively review your supply chain's performance by selecting relevant metrics. There are generic supply chain metrics, but don't focus on those – it’s more important to establish metrics that are vital to your business's needs.

Choose metrics to add value in multiple areas.

• Goals for the business: What are the supply chain measurements now? What would you like them to be? How long will you give yourself to get them there?
• Goals for employees: In what way can your employees help you meet your supply chain goals? How will you offer feedback and evaluate their performance?
• Business priorities: Are there issues that have to be fixed before other issues can be fixed? Which supply chain metrics are most important and should be tackled first?

Examples of metrics that may be appropriate for your business may include:

• Reducing the amount of time it takes between receiving orders from suppliers and shipping orders out to customers.
• Reducing the frequency of having to back order items.
• Increasing customer satisfaction by X%, based on customer surveys.

How Will You Know if the Metrics Are Adding to Your ROI?

There are basic processes for evaluating the results and managing the impact of your metrics on your ROI.

Once you've established your metrics, you must create "rules" for them:

• Determine who holds the majority of responsibility for each metric and who will be working toward meeting each goal.
• Determine how frequently you'll revisit each metric for progress reports.
• Determine the numbers that indicate the successful completion of a metrics goal -- for example, you can decide you'll have met your customer satisfaction goal when X% of your customers respond favorably to a survey about your products and services.
• Determine what you'll do when you achieve a metric – will you "retire" it or will you change the goal to induce further improvements?

Southeast Computer Solutions has years of experience in establishing clear metrics to help their clients meet their ROI goals. Our consultants offer a business process evaluation and assistance with choosing and measuring metrics. Contact us today to see how our team of professionals can help you evaluate and improve your processes to increase efficiency and maximize value in your business.  

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.