I vostri KPI crescono? - Simco Consulting · 2019. 8. 20. · E-mail: [email protected] -...

SIMCO SRL Via Durando 38 - 20158 Milano

tel. 02 39325605 -fax 02 39325600 E-mail: [email protected] - Sito: www.simcoconsulting.it

I vostri KPI crescono? Verso l’ordine perfetto Il WERC (Warehousing Education and Research Council) ha presentato un benchmarking sulle prestazioni dei centri distributivi, facendo emergere innanzitutto l’esigenza di un “metro” di misura condiviso. È statisticamente molto difficile essere superiori alla media, tuttavia, secondo il rapporto, la maggior parte dei responsabili di centri distributivi percepisce le proprie prestazioni come “migliori”. Lo studio del WERC mette a confronto i dati sulla base di 45 indicatori operativi messi a disposizione da circa 1.000 aziende aderenti all’indagine. Le aziende rappresentate appartengono ad un’ampia varietà di settori, hanno dimensioni anche molto differenti e diverse tipologie di Clienti. Buona parte dell’analisi si è concentrata sulle operazioni che caratterizzano la movimentazione di colli (64.5%), mentre il resto su quella di bancali (35.6%). Kate Vitasek, Managing Partner di Supply Chain Visions, illustrando nella sua presentazione la metrica in esame suggerisce alle aziende di selezionare gli indicatori di prestazione focalizzandoli sul proprio Cliente (better for Him, better for You). Tanto per cominciare, suggerisce di mettere a fuoco i quattro elementi alla base “dell'ordine perfetto”:

1. la percentuale di ordini consegnati puntualmente;

2. la percentuale di ordini completi;

3. la percentuale di ordini senza errori da danneggiamento della merce;

4. la percentuale di ordini spediti con documentazione corretta (bolla/fattura).

SIMCO SRL Via Durando 38 - 20158 Milano

tel. 02 39325605 -fax 02 39325600 E-mail: [email protected] - Sito: www.simcoconsulting.it

Secondo il rapporto del WERC, presentato l’ultima settimana di aprile al congresso annuale dell'organizzazione, le performance considerate “best practice” per questi indicatori sono pari a:

1. almeno il 99% degli ordini consegnati puntualmente;

2. almeno il 99,3% degli ordini completi;

3. almeno il 99,8% degli ordini senza errori da danneggiamento della merce;

4. almeno il 99,99% degli ordini spediti con documentazione corretta (bolla/fattura). Viene considerata best practice solo la prestazione relativa alla porzione migliore del campione, pari al 20% delle aziende che hanno fornito risposta (pertanto circa 200). Tuttavia preme sottolineare che non tutte le aziende hanno fornito i dati completi per la rilevazione metrica, pertanto è possibile che le aziende che non raccolgono i dati non hanno probabilmente prestazioni analoghe a quelle che invece li hanno forniti. Un elemento di particolare interesse: più dell’85% degli aderenti all’indagine segnala la rilevazione di consegne puntuali, tuttavia la gran parte delle aziende traccia il tempo di spedizione, mentre solo una minoranza adotta strumenti di rilevazione della consegna presso il Cliente. Probabilmente proprio questo concentrarsi sulla metrica interna, piuttosto che riferirla al Cliente induce le aziende a ritenere migliori loro proprie prestazioni rispetto a quelle realmente erogate.

Visionsupplyhain

Beyond Fill Rate:Perfecting The Perfect Order

Kate VitasekManaging Partner

Supply Chain Visions

www.scvisions.com

1© Supply Chain Visions 2004 – All Rights Reserved

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Learning Objectives

What is good when it comes to measuring distribution performance?

Process vs Results Measures

The What and Why of the Perfect Order Index

Case Study


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You have a 99% fill rate from your DC.

Is this Good?


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Metrics Drive Behaviors

Does Not Consider

Kinds of Behavior Created

Metric

- Did it arrive when the customer wanted?- How much did it cost to fill the order- Cycle time up or down the supply chain (tail)- Customer complaints (quality or accuracy)

- Expedited orders to manufacturing- Airfreight shipments- Large inventories on hand to prevent out of

stocks

99% Fill Rate for a Distribution CenterBad


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Does Not Consider


Metric

- How much did it cost to fill the order?

- Customer complaints (quality or accuracy)

- Did it arrive when the customer wanted?

- How much did it cost to fill the order

- Cycle time up or down the supply chain (tail)


- Cross functional view to work with OM and Manufacturing

- Large inventories on hand to prevent out of stocks

- Expedited orders to manufacturing

- Airfreight shipments- Large inventories on hand

to prevent out of stocks

97% On Time to Customer Request

99% Fill Rate for a Distribution Center

BetterBad


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- Cross functional view to work with OM and Manufacturing and Transportation

- Overall order accuracy and quality – including invoicing

95% Perfect Order Fulfillment

Best

Does Not Consider


Metric



- Did it arrive when the customer wanted?

- How much did it cost to fill the order

- Cycle time up or down the supply chain (tail)


- Cross functional view to work with OM and Manufacturing

- Large inventories on hand to prevent out of stocks

- Expedited orders to manufacturing

- Airfreight shipments- Large inventories on

hand to prevent out of stocks

97% On Time to Customer Request

99% Fill Rate for a Distribution Center

BetterBad


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Learning Objectives




Case Study


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Acquire a Process, Not Functional Orientation

Do not optimize all the smallest particles, but understand interactions to make best trade-offs

A telescope is better tool than a microscope – look at the biggest picture, and the long-term considerations – at processes, not activities


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What’s the Point of a Metric: Process vs Results Metrics

Results MetricsUsually functionally orientedUsually focused on one aspect of a process Measures components of a process – but not the whole processIf left unchecked, drive suboptimization

Process MetricsAre usually company-wide or customer focusedAre cross functional in nature (and sometimes cross company)Measure the “total effect” of a processDrive overall optimization of costs and customer satisfaction


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Develop Cross Functional / Process Framework

The composition of a process measure is based on the composition of the process being measured

Task

Task

Task

Activity

Function

Activity

Task

Task

Task

Function

Activity

Task

Task

Task

Function

Process

Activity Activity Activity

Task

Task

Task

Task

Task

Task

Task

Task

Task


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Example Framework

Cross Functional Metric: 98% Order Fulfillment within 5 Business Days

Distribution Dept

Order Management Dept

Transportation Dept

Del

iver

y Ti

me

% C

usto

mer

A

ppoi

ntm

ent M

et

Ord

ers

Pick

ed/H

our

Ave

rage

Ord

er

Size

Pick

/ Pac

k Sh

ip

Tim

e

Ord

er R

ecei

pt &

Ve

rific

atio

n Ti

me

Ord

er E

ntry

into

Sy

stem

Tim

e

Ord

ers

Proc

esse

d/H

r

Ord

ers

Proc

esse

d/W

k

Indi

vidu

al

Func

tiona

l Met

rics

and

Dat

a

Fill

Rat

e %


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Learning Objectives




Case Study


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What is a Perfect Order?

On time

Complete

Damage Free

Correct Invoice


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Best Practice for Process Metrics:Indexing: The Perfect Order

95% X 95% X X

On Time X Complete X XDamage FreeAccurateInvoicing =On Time X Complete X XDamage FreeAccurateInvoicing =

95% 95% =

POI

81.4%


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What are Some Benchmarks?

93..67 X X X

On Time X Complete X XDamage Free

AccurateInvoicing =On Time

DeliveryXComplete X Accurate

Invoicing =

=

POI

99 X X X

On Time X Complete X XDamage Free

AccurateInvoicing =On Time

DeliveryXComplete X Accurate

Invoicing =

=

POI

99.7

AVER

AGE

BEST

PRA

CTIC

E

93.30 98.35

99.9

98.2

100

84.4

98.6

Source: Warehouse Education Research Council 2005 Benchmarking Study


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Why the Perfect Order?

Ultimate measure of a customer’s order

AMR StudyOnly about 80% of orders in the US are perfect11% of orders are not delivered on time

StockoutsLate shipmentsTransit delaysMultiple deliveries

Helps reduce costs


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Cost of Doing “Wrong”

Physical cost to fix the errorLabor cost for multiple shipments in backorder and additional freight Providing replacement productRefunding purchase priceProviding creditCost of processing additional receipts for multiple shipment

Penalties Retail compliance fees come straight from profits

Lost revenueCost of lost sales Cost of lost customers


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How Much Can It Cost?

Typical Order = profit of $15Five items priced at $5 eachShipped by the best way at a cost of $5Total invoice $30Margin of 50% with profits of $15

Cost to “Perfect” the Order of a Mis-shipment for one item = $9.75Customer service labor and phone charges - $5.00 Transportation for a return - $2.00Replacement item - $2.00Labor to pick/pack/ and check the order again - $.75

Consider the below simple example of an incorrect business to consumer shipment.


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Additional Benefits of the Perfect Order

Earnings Per Share (EPS) – An increase of 10 percentage points in the perfect order rating correlated to 50 cents better earnings per shareReturn on Assets (ROA) – Companies with better perfect order ratings tend to have better ROA. 5 percentage points correlates to 2.5% better ROAProfit Margins – A 3 percentage point better perfect order rating correlates with 1% additional profit margin

A recent study by AMR Research found a correlation between Perfect Order performance and some key financial and market indicators...


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Usage of the Perfect Order Index

Almost 60% do not use POI, even though 73% said it was important or very important

1.1%

6.7%

18.9%

31.1%

42.2%

0% 10% 20% 30% 40% 50%

Not Very Important

Not Important

Neutral

Important

Very Important

No 59%Yes 41%

Do You Use the Perfect Order Measure?

Source: 2005 DC Velocity / WERC Metrics Study


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Learning Objectives




Case Study


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Perceptions GapsPe

rfor

man

ce

Time

Your current trajectory

Best-in-class performance

Your Customer’s perception

t0 t1 t1’

There if often a gap in performance perception


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Intuit Case Study

% On Time & Complete

50%

60%

70%

80%

90%

100%

Mar

Apr

May

June

July

Aug

OT & C Distribution CenterOT & C Retailer

OT & C Goal

Customer Benchmarking showed the DC was consistently reporting higher level of OT&C


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Intuit Case Study

What is On Time?Fill rate vs on time shipmentsOn time shipments vs on time deliveryOn time delivery vs on time and complete

Order is coded into ERP to automatically insert customer business rules into the shipping process

Customer orders on Wed and wants it next WedIf their retail store is in Seattle it goes out on MondayIf there retail store in in Salk Lake City it goes out on Tuesday

Systemic way to flush Proof of Deliveries

Retailer Scorecard ReviewsWon the Supply Chain Partner of the Year from Staples


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Logistics Measures in Context

Cash-to-Cash Cycle TimeNet Asset Turnover, Return on Net Assets

Days of Inventory in entire supply chain by ActivityTotal Safety Stocks as % of total inventory?Safety (hedge) stocks by customer Dedicated inventories by customer Local support inventories

Inventory Turnover Days of InventoryReturn on InvestmentReturn on Assets

Asset Utilization

Perfect Order Fulfillment (right item, right qty, right place, right time, defect free, correct documentation)Overall Customer Satisfaction

On-time delivery to commit, requestOrder Cycle Time VariabilityOrder Processing AccuracyForecasting AccuracyPlanning AccuracyManufacturing Schedule AdherenceStockouts against forecast

Filll rates by customer, commodityAvailable for Customer Pickup per requestErrors by line item, activity, reason code, etc.Cycle Count accuracy

Reliability

Upside Production FlexibilityForecasting/Planning cycle time% Expedite requests fulfilled Order Fulfillment Lead Time

Backlog & Back OrdersAggregate Cycle times by activityOrder Cycle Time Lead time from order receipt to manufacturer complete

Order Fulfillment Lead Time by customer, commodityFill rates by customer, commodity% expedite requests fulfilled by customerCapacity Load & Utilization

Flexibility & Responsiveness

Total supply chain management cost as a percentage of salesTotal Delivered Cost as a % of Revenue

Logistics Costs (order mgmt + distribution + freight) as a percentage of salesFreight costs as a percentage of sales to customerDistribution costs as a percentage of salesInventory shrink and obsolescence as a percent of salesLabor productivity Analysis Over, short, damage as % of salesReturns as a percentage of sales

Costs per line, per order, per activity, per shift, etcLoad factors, lines per order, Qty per line, etc.(cut?)Freight costs per pound by mode and destination

Cost

Strategic MeasuresProcess MeasuresResults Measures

Companies should strive for “balanced” metrics that are more process and strategic in nature

As published in Jan 2003 Issue of Logistics Management

Source: Supply Chain Visions

Visionsupplyhain

Kate VitasekManaging Partner

Supply Chain Visionswww.scvisions.com

I vostri KPI crescono? - Simco Consulting · 2019. 8. 20. · E-mail: [email protected] -...

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