Understanding and filling customer needs collaboratively adds more value than designing processes and systems to beat the competition. Here's an example of how one company did it.
A common saying when it comes to performance measurement is, "You can't manage what you don't measure." But more importantly, the real challenge comes in determining what to measure and how to measure it.
Often manufacturers fail to adopt the right metrics for their businesses to track. However, the proper metrics can accurately reflect performance improvements or services provided across segments, and reinforce appropriate practices for continuous improvement. One such metric that measures the effectiveness of the supply chain is order fulfillment, which takes into account the cross-functional performance of an enterprise.
Manufacturers often design or adopt fulfillment metrics and targets that are neither indicative of their customer requirements, nor take into account the realistic capabilities of their processes and systems. For instance, while the sales group likes to promise the world to their customers, the supply chain group can't afford to give up the farm in trying to keep up with those promises. To avoid such problems it is critical, then, to understand and target what matters most to the customer, which is an important step toward understanding the end consumer.
Measuring Fulfillment Performance
In consumer packaged goods (CPG) manufacturing, the following are some of the ways order fulfillment is measured:
- Line Fill Rate