With all organizations being bombarded with information, it is essential to strategically evaluate data. In order to identify the critical few areas from the trivial many, dashboards have become a valuable tool for companies to focus on important supply chain metrics. These dashboards provide a common set of measures to ensure you are examining the areas that truly matter to your business. Think of the dashboard in a car displaying only the elements you positively need to know like speed, miles, and gas.
Dashboards also provide a consistent framework from business unit to business unit, allowing you to understand individual value streams and overall company goals. They mimic the idea of the balanced scorecard, preventing companies from getting lost on one single metric like over prioritizing quality versus costs, for example. Below are the top six dashboards every supply chain executive should see:
Safety is a critical focus for all businesses. Organizations care about ensuring employee well-being and preventing workplace injuries. For a dashboard dedicated to safety, the industry standard metric is the OSHA recordable incident rate. This measures how many accidents occur per 200,000-man-hours. Organizations also examine loss time incident rate, which looks at the amount of time an employee misses work due to an accident. Additionally, behavioral safety programs look at incident observations. For this particular metric, a high number is not always bad. Rather, a larger number of incident observations can indicate that potential issues are being detected and prevented.
Today, consumers demand both speed and quality, highlighting the value of optimizing supply chain operations. How an organization evaluates quality depends on the pressure points in their supply chain. For this dashboard, quality can be defined in a variety of ways like order accuracy, picking accuracy, or inventory accuracy. Defects per million opportunities (DPMO) is another common metric. A defect can be labeled as damage or missed pick, for example. DPMO can be stringent depending on how it is measured, diving as deep as defects per line.
As supply chain velocity continues to grow in importance, delivery has become a greater focus in the industry. The most common delivery metric looks at On Time in Full (OTIF), which evaluates if a supply chain delivers the expected order in the time promised to the customer. Some organizations will measure OTIF on time, while others will examine fill rate or first pass fill. The delivery dashboard pulls together a few different elements, which are driven by the specific needs of the business and its supply chain. For example, a company that ships direct from factory to the retail floor may measure appearance of products because they are going directly from the dock door to the store floor.
Given the impact productivity has on costs, this area is crucial for executives to understand how their employees are performing. Productivity is calculated by some unit of measure over some unit of time, typically against an hour basis. Common measurements include units per labor hour, cases per hour, and pallets per hour. Depending on the complexity of their supply chain, organizations may be evaluating productivity across four or five value streams. In the distribution center, this means identifying receiving productivity, put away productivity, picking productivity, and loading productivity. In transportation, productivity often pertains to miles per driver or truck, empty miles as a percent of miles driven, and fuel economy.
Costs have a strong correlation with productivity: if productivity increases, costs should decrease. Depending on a company’s primary unit of measure, cost per unit is looked at by case, each, or pallet. This dashboard can look at direct, indirect, and total costs. Direct costs are incurred by the people who are actually on the floor or in the trucks, while indirect costs come from support functions like the shipping receiving office and planners. Total landed costs encompass all elements, accounting for areas like holding inventory, delivery, all direct and indirect costs, and transportation costs. In transportation, cost per pound or cost per mile are also important to keep an eye on.
A company’s morale can signal if a business is trending in the right direction. Turnover rates are a strong indicator of an organization’s morale. It is hard to cultivate a positive working environment if a business is constantly cycling through team members. Engagement scores from engagement surveys like the Gallup Q12 process are a popular measure as well. Engagement scores answer questions like: is my team engaged? Do I have the hearts and minds of the team? Does my team feel valued and heard? Do employees have the supplies and tools they need?
From safety to morale, dashboards pinpoint the data that is most pertinent for executives to focus on. While the exact measurements will change depending on the unique operations of each organization, dashboards are an effective framework to analyze your business and ensure your organization is evaluating the most important data.