Asked by Dalton Gross on May 11, 2024
Verified
Discuss how Performance Measurement can affect Supply Chain Management.
Performance Measurement
The process of evaluating the efficiency and effectiveness of actions or operations within an organization or system.
Supply Chain Management
The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.
- Understand the significance of assessing performance within supply chain management.
Verified Answer
LW
Linsey WalshMay 18, 2024
Final Answer :
Most organizations have measures of performance or metrics in place to analyze and evaluate their efficiency and progress over different time periods. Sometimes, such measures are used for setting baseline performance objectives or expected outcomes, for instance, orders filled and shipped per day. Measurement is important, and at this juncture, it is important to recognize that lower-level metrics in an organization must connect directly to the high-level performance measures of the organization and the supply chain, which are usually net profit, return on investment, or assets and cash flow. In some instances, metrics are set that appear logical for the subunit of the organization but are suboptimal for the overall organization or supply chain. For example, the warehouse manager who is measured by the cost per cubic foot of units stored will be motivated to fill the warehouse to the ceiling.
Learning Objectives
- Understand the significance of assessing performance within supply chain management.
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