Which method is effective for measuring supply chain performance?

Key Performance Indicators (KPIs) are essential tools for measuring supply chain performance because they provide quantifiable metrics that reflect the efficiency and effectiveness of various processes within the supply chain. KPIs are specifically designed to track critical aspects, such as inventory turnover, order fulfillment rates, lead times, and cost efficiency. By analyzing these metrics, organizations can identify strengths and weaknesses in their supply chain operations and make informed decisions for improvements.

KPIs offer a reliable benchmarking mechanism, enabling companies to set targets, monitor progress, and achieve strategic goals. They also help facilitate communication and alignment among different departments in the supply chain, ensuring that everyone works towards common objectives. This data-driven approach supports continuous improvement and helps organizations remain competitive in a dynamic market environment.