Descriptive SCM metrics provide valuable insights into how well a supply chain is performing and identify areas for improvement. These metrics focus on thre...
Descriptive SCM metrics provide valuable insights into how well a supply chain is performing and identify areas for improvement. These metrics focus on three key areas:
1. Inventory turnover rate (ITR) measures how quickly a company sells and replaces its inventory. A high ITR indicates efficient inventory management and reduced stockouts.
Example: An ITR of 60% means a company sells and replaces inventory items 60% of the time they are purchased.
2. Fill rate measures the percentage of orders that are fulfilled completely. A high fill rate indicates that the supply chain is able to meet customer orders efficiently.
Example: A fill rate of 95% means that the company fulfills 95% of customer orders on time.
3. On-time inventory (OTIF) measures the percentage of orders that are delivered on the promised delivery date. A high OTF indicates that the supply chain is able to deliver orders on time.
Example: An OTF of 98% means that the company delivers 98% of orders on time