Key performance indicators in the supply chain retail refer to the supply chain and logistics:
The network or retailers, distributors, storage facilities and distributors who may participate in the delivery, production and sale of a certain product or products.
Key Performance Indicators Of The Supply Chain Retail:
They would be ones such as Inventory Carrying Cost; the inventory carrying rate into the average inventory value. This would be followed by the yearly inventory costs- an instance would be if you could add up annual inventory costs; these would be ones such as if you had the storage cost: 800k, the handling cost which is 400k followed by obsolescence which is 600k and the damage costs which are 800k. These costs should then be added; the answer in this case would be 2600k.
This should be followed by the next step, which would be to divide the inventory costs by the average inventory value; the 3400 which would be divided by 34000 would present the answer of 10% and this in turn would make up the inventory carrying rate. Other categories which would also form part of the key performance indicators in the supply chain retail would be ones such as the DSA which is the Delivery Schedule Adherence or DSA.
The Delivery Schedule Adherence is a business metric which is used to calculate the timeliness of deliveries from various suppliers. If products are delivered on time, particularly where the retail industry is concerned, then this means that the customers can stay in fashion at all times and won’t stay out of touch with ongoing trends- this also means earning the respect of your customers. Other similar categories of the key performance indicators of the supply chain retail would be ones such as the Customer Order Cycle Time. It is the anticipated or expected time of a Purchase Order; it refers to the gap between the Purchase Order Creation and the Requested Delivery Date. It tells you the cycle time you should expect to receive products.
This is then followed by the Inventory Replenishment Cycle Time which is a measure of the cycle time including the time that would be needed to deploy the products to a certain distribution area. Last but not least, would be the percentage of backorders. These are the number of unfulfilled orders; these are the orders which are either sent to the suppliers very late or they are never met and they are often hidden from the suppliers; this however is a very bad indicator of performance because when there are not enough clothes or other products to meet the customer’s demands, this is actually very bad for business and should be dealt with as soon as possible.
All in all however these indicators are highly significant because they show how well or badly a business either will or might do in the future.