How to Build Your Supply Chain Metrics Dashboard to Make Better Business Trade-offs
From a business perspective, it is vital to have all necessary data about your company’s supply chain performance at your fingertips, anytime you need it. In this article we’ll share the insights on how to acquire a dashboard that would provide you with instant access to all crucial supply chain KPIs and metrics for taking well-reasoned constructive business decisions.
What is a supply chain and what does it consist of?
Besides the suppliers, final products (or service) provider, and customers, supply chains also consist of all intermediate parties. The latter may include shipping vehicles, warehouses, marketing efforts, distributors, retail facilities, any software tools and information resources, etc., required to make and deliver the value to clients.
Supply chain components are largely defined by the company’s specialization, depending on whether it’s oriented on manufacturing, or provides services. Moreover, they differ for every business reflecting the peculiarities and uniqueness.
Supply chains examples
Here are a few supply chain examples. They include the ones for a manufacturing industry, and for an organization that provides services, and highlight the structural differences between them.
Basic manufacturing supply chain
A more realistic manufacturing supply chain example
However, quite often there is more than one supplier of raw materials. In addition, the enterprise may have multiple sales representatives, retail locations with their own storages, and other intermediate links, making the supply chain structure more complex.
Supply chain for a university (educational services)
Supply chains for organizations that provide services have fundamentally different components. Instead of processing physical goods to produce final products, service businesses focus more on people, and information exchange and processing. To illustrate this concept, here is an example of a generalized supply chain for an educational institution.
Key supply chain metrics and KPIs
Before planning your SCM dashboard functionality, define all the components your business supply chain consists of. Performance data from each of them brings valuable insights for the overall picture. For instance, here is a bright example of how digital transformation of warehouse and delivery systems resulted in drawing more clients to a group of convenience stores.
Without having the supply chain precisely defined, the business faces more challenges. They may include lack of forecasting, unplanned activities, payment and demand vs supply issues, etc.
KPIs monitoring and analysis allow spotting both the weak and strong spots of the supply chain flow, enabling you to
- make well-reasoned decisions regarding the future development of your business
- work towards elimination of the supply chain inefficiencies and dysfunctions
- focus on implementing and scaling the solutions that proved to be the most productive and beneficial
- get insights on how to reduce the cost of creating products or services, how to diversify them and stand out on the market while reaching a broader audience of clients, and much more.
You can find a list of important KPIs and metrics for manufacturing businesses and financial operations in general in our article KPI Management Software: Manufacturing Key Performance Indicators & Metrics to Track Operational Productivity.
Several of the KPIs, mentioned in the article above, e.g. revenue per employee, return on assets, maintenance cost, are crucial for the service-providing companies as well.
Here are a few other service industry metrics that shed light on the business processes.
- Service capacity: the maximum number of clients the business can provide services to during a given period of time
- Employee utilization rate: the ratio of the billable time when the employee is occupied with their duties to the total number of hours they are available to work
- Employee performance: results vs set expectations over a fixed period of time
- Bench metrics, including
- the number of employees who are currently not engaged in any business processes (they are ready to start working whenever necessary, and keep receiving the salary and other social benefits provided to the company workers)
- the average time spent on bench
- bench effectiveness, which compares the expenses and time required to fill a vacancy versus expenses of having an employee on bench and business profit from the immediately filled job position, etc.
- Staff turnover rate: ratio of the number of employees who left the company to the total number of employees within a fixed period of time. This metric can be calculated separately for those workers who left their positions voluntarily, and for those who were fired
- Customer’s feedback and number of complaints
- Number of referrals
KPI dashboard optimization recommendations and features
Here are the steps for dashboard customisation to particular business processes and peculiarities to highlight the most informative KPIs.
- Define your supply chain components and how they are linked to one another.
- Set objectives that you would like to achieve with each of these components.
- Try to think of all supply chain metrics that would be informative regarding your objectives, and that could be measured (tracked or/and calculated).
- Select the minimal set of KPIs that are the most important and informative for your business. Make sure they allow you to assess the whole supply chain flow. There is no point in tracking all possible metrics, as that would result in information overload, time-consuming analysis and prioritization, bringing extra complexity to the decision-making process.
- Choose which metrics should be at your fingertips.
- Divide the chosen in (5) supply chain metrics into groups, depending on which KPIs should be viewed together to avoid navigating among a plethora of open tabs when each metric is displayed separately.
Besides, the dashboard features should provide the ability to see how the things currently are and to foresee the ways for their development. Some of the desirable supply chain metrics dashboard functionality includes the following:
- Metrics monitoring in real time
- Automatic reports generating, encompassing different periods of time, e.g. daily, weekly, monthly, yearly reports, etc.
- Integration with suppliers’ software to be able to see:
- the amount of supplies available at the moment
- the amount of supplies required within the next delivery and the ability to fulfill the order on time
- opportunity for business growth and increasing the orders’ size
- Sandbox to simulate possible business development scenarios and predict their outcomes (implementation of IoT and AI tools and decision-making algorithms)
Supply chain metrics dashboard: ready solution vs custom development
Before deciding if you can go with an existing supply chain management software, or need to custom develop one, make sure you know exactly which metrics and dashboard features are crucial for your business. This knowledge will enable you to effectively analyze the ready solutions. In general, we can define their following advantages and drawbacks.
Pros of the ready software solutions:
- They are faster to implement
- The cost of a subscription to a particular software is way cheaper than custom development, although it may reach a similar level if you look at it from a long-term perspective.
Cons of the ready software solutions:
- Ready solutions seldom match the unique business requirements
- They may be harder to integrate with the software already used for your business
- Mismatching with the supply chain metrics that are crucial for your particular business does not allow you to see and analyze the whole picture. Thus, there is not enough data for a well-reasoned decision-making process aimed to strengthen the supply chain and improve your business.
Consequently, we can point out the benefits of building custom solutions, and the challenges one may face.
Benefits of the custom supply chain metrics dashboard development:
- It is tailored according to your business processes, provides all key insights on the supply chain performance
- Higher flexibility to match any changes in the supply chain
- If your customly developed solution may be useful for other businesses too, you may think of turning it into a SaaS KPI dashboard for further monetization
Challenges of the custom supply chain metrics dashboard development:
- High development cost
- Longer time of implementation compared to setting up the ready solution
- No trial period to double-check if this is exactly the software you need, meaning that
- to elicit the key functionality, it’s necessary to discuss the dashboard features with the personnel who directly work with the related business processes or/and will use the software
- you should develop an MVP first to test the basic functionality by real users, and proceed with its further development only after making sure that it perfectly suits their needs.
Let’s sum it up
A properly suited supply chain metrics dashboard is a powerful tool to streamline the development of your business and bring it to a higher qualitative level. To acquire the optimal SCM software, here are a few important things you need.
- An expert knowledge of the business processes and the metrics that measure their performance
- Define the crucial KPIs and which of them are most informative when viewed together in one tab. It will provide you with the explicit statistical and analytic data while shortening the time spent on navigation through the app and switching between different tabs
- Compatibility analysis of your company’s supply chain requirements and ready KPI dashboards. If they match your business needs - check them out. If they do not - describe the dashboard functionality you need, to develop it customly.
Each business is unique, and there’s definitely more to the topic when looking at each case individually. Feel free to get in touch with us if you have any inquiries. We will be glad to review your dashboard idea and share our experience to make the most of its custom development.