How to measure the success of a supply chain project?

Filed in archive Practical Tips on October 5, 2008

Measuring the success of a supply chain initiative during and after the project is a crucial task and goes beyond the timeliness and cost effectiveness of the project itself. It may be the case that the project is totally on time and has absorbed less money that it has been accepted but it doesn't satisfy the strategic goal of supply chain. Therefore, even though it might seem very basic, I decided to bring some of the common KPIs used to measure the success of the supply chain projects over here. Some of the common KPIs include:

- Inventory Value
- Inventory Turn
- Delivery Lead Time
- Cast to Cash cycle
- On Time In Full Deliveries
- Asset Utilization

The tricky point to remember here is the link to ROI. The simplest calculator for determining the effectiveness of an initiative is ROI. What we have to do is to measure indicators which are related to ROI such as the ones above (or the other ones which might be more relevant) and also make sure that they have a positive effect on the return on investment.