Logistics :

• Inventory
• Supply Chain
• Transportation
• Warehousing

Risks In Supply Chain Management

      Nowadays, majority of supply chain executives are aware of the various risks that are involved in managing supply chains, but are usually not well-equipped to deal with them. Most of these risks come up due to immense pressure to upgrade bottom-line, eliminate duplication of supply chains, reduce waste, and increase productivity. Risks in SCM are classified into two categories: Unsystematic risks and Systematic risks. More..

Performance measurements in supply chain can be broadly categorized into the following types:

1. Quantitative Measures: Performance at delivery, flexibility, response time, utilization of resources, and lead time for order-to-delivery, etc.
2. Qualitative Measurements: Product quality and customer satisfaction.

While all these measurements are more or less similar, the particular performance goals decided by every segment may perhaps be somewhat different. Out of the above categories of performance measures, quantitative measures used to assess performance of any supply chain are of much greater importance than the qualitative ones. They are further classified into 2 categories: Financial and Non-financial measures of performance.

Financial Measurements of Performance of Supply Chains:

Supply chain of any business has a number of operational and fixed costs linked to it. These costs arise mainly due to facilities, transportation, operations, inventories, labor, materials, and technology. Effectiveness of the supply chain management depends on maximizing the total revenue while reducing the costs to as low as possible. Supply chain’s financial performance is assessed by evaluating items, such as cost of the raw material, costs of inventory holding, revenue generated from sold goods, activity-based costs of manufacturing, assembling and material handling, costs of returned and expired goods, credits for returned goods or late deliveries, and penalties associated with late or returned orders. Once all these major performance indices of financial performance are calculated, they must be evaluated in totality using primary modules, such as inter-company transactions, inventory costing, activity-based and transportation costing.

Non-Financial Measures of Performance of Supply Chains:

The most significant performance measurements in this category include level of customer service, cycle-time, utilization of resources, flexibility, quality, ability to perform, and levels of inventory.

More Articles :

• Business Value Of Supply Chain Management
• Performance Measurements In The Supply Chain
• Risks In Supply Chain Management
• Supply Chain Management In Information Technology