Fundamentals Of Supply Chain Management Fixed Jun 2026

| KPI | Formula / Definition | Target Direction | |-----|----------------------|------------------| | Inventory Turnover | COGS / Average Inventory | Higher (faster) | | Cash-to-Cash Cycle | DSO + DIO – DPO | Lower (shorter) | | Fill Rate | % of customer demand met from stock | Higher (>95%) | | On-Time Delivery | % of orders delivered by promised date | Higher (>98%) | | Supply Chain Cost as % of Sales | Total SCM cost / Total sales | Lower | | Perfect Order Rate | (OTIF + Undamaged + Accurate doc) | 100% theoretical |

Often referred to as logistics, this component coordinates customer orders, schedules delivery, dispatches loads, invoices customers, and receives payments. It relies on a network of warehouses to store goods and various shipping methods (such as trucking, air, rail, and ocean freight) to move products efficiently.

In the past, "Making" was about mass production. Today, it is about mass customization—making unique products at scale. fundamentals of supply chain management

Break down silos between procurement, production, and marketing.

To help tailor this guide further or assist with your specific operational needs, please tell me: | KPI | Formula / Definition | Target

Every supply chain manager faces inherent conflicts:

Transforming raw materials into finished goods. This includes production scheduling, quality control, and labor management. To protect operations against unexpected disruptions

Supply Chain Management is the systemic coordination of traditional business functions—including procurement, manufacturing, logistics, and sales—across a company and its external partners. It aims to manage the flow of goods, data, and finances from the initial supplier to the end consumer, optimizing efficiency and responsiveness.

To protect operations against unexpected disruptions, companies deploy several key strategies: