What is the single most crucial KPI for your enterprise, or your supply chain?
What is the biggest single factor limiting your ability to achieve more of your goal?
What single metric stands between you and making more money tomorrow than you are making today?
There are only two (2) system-level (enterprise-level) KPIs that matter—in the long run:
Interestingly, these two KPIs are inextricably linked. Almost without exception (in fact, I cannot think of any exceptions in the long-run), companies and supply chains that suffer from poor on-time performance, ultimately suffer from low return on investment, as well.
Return on investment (ROI) is, of course, measured over time. While the investment part of the equation may remain relatively static, the "return" part—the profit—is garnered over time.
Even more to the point, on-time performance is directly related to the clock on the wall and the calendar that hangs beside it.
On-time performance affects ROI both directly and indirectly.
Poor on-time performance may affect profits (and, hence, ROI) directly through lost orders. But it can have lasting effects on ROI in other ways, as well. Lost orders may lead to lost customers. Lost orders and lost customers lead to increasing sales and marketing expense in attempts to make up for the revenues lost and customers disaffected. Greater discounts, required to recapture lost sales and lost customers may cut into margins. All of these lead to long-term reductions in ROI—over time.
If we take this baseball analogy a little further, we can draw a rough equivalence between on-base percentage and on-time performance.
Every day your company and its supply chain have a certain number of opportunities to "get on base" (deliver on-time) or "get an out" (fail to deliver on-time). While there is still time in the day, some things may still be possible. Once the clock expires, nothing is possible—you can no longer deliver "on-time."
If time is your crucial limiting factor to "winning" or "losing," then two simultaneous objectives should be the concern of supply chain managers:
These two, working together, satisfy the demands of two system-wide KPIs: on-time performance and return on investment.
Many of the firms with which we come into contact in our consulting business have realized that time is the real constraint. Their executives and managers are so occupied—day-in and day-out—with the activities of normal routines and ongoing firefighting that they do have neither the time nor the energy to effectively work toward ongoing improvement.
In such cases, working with a consulting partner like RKL eSolutions that's capable of rapidly bringing focused attention to those few changes that will improve your odds of "winning" through on-time performance and increasing ROI can pay-off handsomely.
Many times the changes required for early and rapid improvements have nothing to do with technologies, at all. Instead, seeing things in a new light and taking the proper steps toward changes in policies, procedures, and tactical execution can bring about dramatic improvements with little or no additional investment.
[feature_box_creator style="1"]
Time and management attention are crucial limiting factors for your success, RKL eSolutions is here to help you uncover new ways to improve your odds of success and make gains.
Get In Touch[/feature_box_creator]