PRINCIPLES OF GOOD Supply Chain Management
A metric is a way of measuring something. An activity is something to be measured. Here are some metrics pertaining to a runner; speed, metabolic base rate, cardiovascular efficiency. If the activity or “principle” being considered is “Being competitive in organized races,” then clearly the most relevant metric is speed. The others are important, but play supporting roles; a runner with a low metabolism and poor cardio efficiency is unlikely to be fast, and even less likely to be a good distance runner.
Following your careful study of the two articles, you are to write an essay that includes the following:
A short description of each of the seven principles.
A short description of the eight metrics, in civilian terminology (see the example above)
An explanation of which metrics are most relevant to evaluating the company’s success with respect to each of the seven principles.
There are no “right answers.” Construct strong logical arguments, showcasing your detailed understanding of both the company you’re studying, and the background information. Use citations and references as appropriate.
Anderson et al. (1997) lists seven principles. These are groupings of activities that a successful company with strong SCM ought to perform. The groupings are to some extent arbitrary, but they are reasonably inclusive and exhaustive.
Klapper et al. (1999) lists various metrics by which SCM should be evaluated. These are specific performance parameters that can, at least in principle, be expressed as numbers. Examples include percent on-time deliveries, logistics cost as a percentage of the cost of the goods transported, and the like.
The list in Klapper et al. (1999) is couched in military terminology; one metric, for example, is “Weapon system not mission-capable (NMC) rates.” To illustrate, an attack helicopter company with two out of 20 aircraft grounded for lack of parts would have a NMC rate of ten percent. One civilian equivalent of NMC might be, “Percent of production capacity idle because either parts or materials are lacking.” The exact metric would depend upon the company.
