Part $3$: Key Performance Indicators $($KPIs$)$ for Supply Chain

Format: Written report $(4-5$ pages$)$ or Visual Presentation $(5-10$ minutes$)$

Description: Read Case $17-3$ thoroughly. Evaluate the current KPIs used at QBL Products as presented in Case $17-3.$ Propose recommendations for improving performance measurement and setting targets.

Case Synopsis: Arnold Chong, director of supply chain at QBL Products, had been asked by the company$$s president, Meghan Dilworth, to create a set of key performance indicators $($KPIs$)$ for the supply chain group. Once created, the next step would be to set targets and monitor progress. Meghan was going through a similar exercise with sales, finance and accounting, operations, and human resources. Arnold had been measuring departmental performance through a combination of customer deliveries, supplier quality, inventory turns, and purchasing cost savings. Top of mind for Arnold was that his annual bonus would be tied to achieving KPI targets.

Objective: Assess and improve supply chain performance measurement.

Expectations:

$-$ Assess the current KPIs for customer deliveries, supplier quality, inventory turns, and purchasing cost savings.

$-$ Recommend improvements to the KPI framework.

$-$ Propose methods for negotiating KPI targets and addressing external factors.

You may refer to the following questions to guide your reflection:

$-$ What is your assessment of the current supply chain KPIs used at QBL Products?

$-$ Should cost avoidance savings be recognized?

$-$ How do the supply chain function and other departments enhance each other$$s performance?

$-$ How should the performance of suppliers versus the supply chain function be measured?

$-$ How would you approach negotiating the targets?