Enhancing supply chain performance measurement frameworks with external global indicators

This is an excerpt of the original article. It was written for the January-February 2024 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2024

Back in 2019, we seemed on a consistent path to the future. Then COVID-19 arrived on the global scene, and all predictions went out the window. As 2024 begins, everyone wants to know what the year will look like. I predict continued interest in circular supply chains, cybersecurity, visibility, and digital supply chains, to name a few. But I am not alone. So, I’d like to share five things that I am particularly interested in this year.

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Performance metrics play a critical role in the planning and management of a firm’s supply chain operations and network. Today, firms employ an ever-increasing array of dashboards, scorecards, and key performance indicators (KPIs), all of which provide perspective on both the efficiency and effectiveness of a firm’s internal operations and its external interactions with customers and suppliers.

At the same time, and with far less publicity and general industry awareness, a second type of supply chain status measures have emerged and flourished. We will term these “macro indicators” that offer a perspective not at the “individual firm” level, but rather at much broader macro levels such as international transportation lanes (e.g., China to the United States), geographic regions (e.g., the United States, Germany, and Asia), and other groupings. These macro indicators vary widely, appear in many different forms, and utilize different methodologies. However, they share the common characteristic of offering an evaluation of some aspect of supply chain operations that will generally affect many firms across many industries. Finally, we note that many of these measures have existed for decades in relative obscurity, while others represent more recently created tools developed in response to the supply chain disruptions associated with the recent pandemic.

In this article, we will first discuss individual firm supply chain performance metrics, and then consider supply chain macro indicators. Our discussion of firm-level metrics presents a general framework that a supply chain organization can employ to house its performance measures. The macro indicator discussion that follows afterward highlights both the global as well as the narrower perspectives these measures can offer about particular supply chain activities, transportation modes and geographic regions. Finally, we will present and illustrate approaches supply chain professionals and their firms can utilize to integrate these two disparate forms of metrics.

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