Deck 16: Supply Chain Performance Measurement and Metrics

Question 1

When organizations select metrics to assist them in achieving optimal supply chain efficiency and effectiveness, the measures selected must possess certain characteristics. Which of the following would not be one of those characteristics?

A) Action-oriented-once causes are found, share them with all groups.
B) Objective-tied to the work being done.
C) Results oriented-employees being measured should be involved in collecting performance numbers.
D) Tied to individual personal goals-an employee can't be good at everything.
E) Tied to root causes-why didn't we reach this goal? This shows where to focus efforts.

Answer 1

Tied to individual personal goals-an employee can't be good at everything.

Question 2

Metrics are required to evaluate performance and establish diagnostics for all phases of the SCOR Model. The number of product defects, production cycle time, and product quality level would be examples of metrics utilized in the __________ phase of the SCOR Model.

A) Deliver.
B) Make.
C) Plan.
D) Return.
E) Source.

Answer 2

Make.

Question 3

Metrics are required to evaluate performance and establish diagnostics for all phases of the SCOR Model. Material acquisition costs, source cycle time, and raw material days of supply would be examples of metrics utilized in the __________ phase of the SCOR Model.

A) Deliver.
B) Make.
C) Plan.
D) Return.
E) Source.

Answer 3

Source.

Question 4

Metrics are required to evaluate performance and establish diagnostics for all phases of the SCOR Model. Order fill rates, delivery lead times, and transportation delivery costs would be examples of metrics utilized in the __________ phase of the SCOR Model.

A) Deliver.
B) Make.
C) Plan.
D) Return.
E) Source.

Question 5

High-quality data exhibit certain characteristics which are important in supply chain decision making. Which of the following is not one of those characteristics?

A) Accuracy.
B) Completeness.
C) Consistency.
D) Cost.
E) Timeliness.

Question 6

Which of the following would not be considered an obstacle to a firm having high-quality data available to them?

A) Bad data.
B) Cost.
C) Fast-changing markets.
D) Globalization.
E) Lack of standards.

Question 7

Having high-quality data can result in several benefits. Examples of __________ benefits would be better asset utilization, planning and forecast accuracy, and on-time delivery of products.

A) Customer.
B) Financial.
C) Operational.
D) Productivity.
E) Workflow.

Question 8

Supply chain metrics must be understandable to senior executives such as the CEO, COO, and others. There are four major metrics that are the most relevant to senior executives and they include all of the following EXCEPT:

A) Cash-to-cash cycle.
B) Economic value-added (EVA).
C) Perfect order percentage.
D) Supply chain cost as a percentage of revenues.
E) Working capital.

Question 9

The most well-known and classic example of a firm who managed their cash-to-cash cycle better than almost everyone else, is:

A) Dell Computers.
B) Ford Motor.
C) General Motors.
D) Ikea.
E) Walmart.

Question 10

Some cost metrics can be macro or strategic in nature, while others are more micro or tactical. Which of the following would be an example of a macro or strategic metric.

A) Costs per activity.
B) Costs per order.
C) Freight costs by mode and destination.
D) Total delivered costs.
E) Transportation load factors.

Question 11

Which of the following would not be an example of a service metric?

A) Costs of claims handling.
B) Dock-to-stock cycle time.
C) Order fill rate.
D) Timeliness of order status updates provided to customers.
E) Time taken to answer customer inquiries.

Question 12

In a study of warehousing metrics conducted for the Warehouse Education and Research Council (WERC) for more than 10 years, one metric has remained one of the "top 2" metrics in every study reported on since 2007. That metric was:

A) On-time shipments.
B) Order picking accuracy.
C) Overtime hours to total hours.
D) Peak warehouse capacity used.
E) Percentage of supplier orders received damage-free.

Question 13

The Supply Chain Consortium has conducted research into the key metrics and benchmarks utilized within supply chain management. They have developed several core benchmark areas. Which of the following was not one of those core areas identified by the Supply Chain Consortium?

A) Customer service.
B) Sourcing.
C) Supply chain planning.
D) Technology.
E) Transportation.

Question 14

The APQC Process Classification Framework (PCF) includes operating processes, and management and support services. Which of the following would be an example of an operating process?

A) Develop and manage business capabilities.
B) Develop and manage human capital.
C) Develop vision and strategy.
D) Manage financial resources.
E) Manage information technology.

Question 15

The APQC Process Classification Framework (PCF) includes operating processes, and management and support services. Which of the following would be an example of management and support services?

A) Deliver physical products.
B) Deliver services.
C) Develop and manage products and services.
D) Manage enterprise risk.
E) Market and sell products and services.

Question 16

In warehousing, many firms utilize the APQC and/or CSCMP Process Standards. Of the following which would be a "best practice" example?

A) Batch picking of the same SKUs for multiple orders.
B) Loading vehicles in unloading order.
C) Order picking in travel path sequence.
D) Wave pick sequencing to plan picks per zone in advance.
E) All of these would be examples of "best practice."

Question 17

A typical Key Performance Indicator (KPI) is constructed of four components. Which of the following items is not one of those four components?

A) Business event to be measured.
B) Cost of implementation.
C) Starting benchmark.
D) Targeted achievement.
E) Time frame.

Question 18

Supply chain sustainability is becoming more important. KPIs that would be utilized in most organization would include all of the following EXCEPT:

A) Costs for implementing various sustainability initiatives.
B) Energy usage rates of equipment and facilities.
C) Greenhouse gas emissions for the entire supply chain network.
D) Load density (in transportation).
E) Supply chain waste from operations, packaging, expired products, or damaged goods.

Question 19

The process of building or developing a scorecard can be summarized in six steps or stages. The first step is to:

A) Assess the firm's foundations, core beliefs, market opportunities, competition, finances, goals, and understanding customers.
B) Breaking down the overall business strategy into smaller elements, which can be referred to as objectives.
C) Development of the overall company strategy or strategies.
D) Performance measures are developed so that the firm can track its progress on achieving its objectives.
E) Strategic map of the overall strategy or created is created using the principles and concepts associated with process mapping.

Question 20

The process of building or developing a scorecard can be summarized in six steps or stages. The last step is:

A) Breaking down the overall business strategy into smaller elements, which can be referred to as objectives.
B) Development of the overall company strategy or strategies.
C) Initiatives or tactics are identified that can be implemented to achieve the strategy or strategies.
D) Performance measures are developed so that the firm can track its progress on achieving its objectives.
E) Strategic map of the overall strategy or created is created using the principles and concepts associated with process mapping.

Question 21

The "Voice of the Customer (VOC)"can be defined as the process of capturing a customer's expectations, preferences, and aversions.

Question 22

High-quality data can have a significant impact on improving employee productivity.

Question 23

When organizations are developing systems for obtaining and maintaining high-quality data, identifying how work activities and workers use and interface with the data is referred to as "stewardship."

Question 24

From an organization's perspective, a positive cash-to-cash cycle would be a good thing, while a negative cash-to-cash cycle would not be good.

Question 25

Economic value-added (EVA) is an estimate of a firm's profit, or simply, the cost of capital has to have a greater benefit than invested capital.

Question 26

A majority of firms are satisfied with the state of their current efforts in developing and implementing supply chain metrics.

Question 27

The objective of a perfect order approach is to attempt to eliminate all mistakes or errors except for the very few that occur from time to time.

Question 28

The U.S. Department of Defense utilizes cost metrics with respect to their primary mission of providing defense to the United States. They define cost as the price paid for the supply chain resources required to deliver a specific performance outcome.

Question 29

"Order fill rate"is calculated by taking the total orders shipped and dividing that number by total orders, resulting in a percentage that could reach 100 percent if every order was always shipped correctly.

Question 30

"Dock-to-stock cycle time"is calculated as total cycle time in hours to process all supplier receipts in a time period divided by the total number of supplier receipts for the time period.

Question 31

One of the core benchmark areas identified by the Supply Chain Consortium is "supply chain planning."Examples of that core area would include metrics such as financial inventory turns, days of purchases outstanding, and perfect order completion.

Question 32

APQC's Process Classification Framework (PCF) is an open standard to facilitate improvement through process management and benchmarking regardless of industry, size, or geography.

Question 33

The cash-to-cash cycle (C2C) includes measures of days of inventory (DOI), days of payables (DOP), and days of receivables (DOR).

Question 34

The calculation of the cash-to-cash (C2C) cycle would be: C2C = DOI + DOR + DOP.

Question 35

KPIs vary depending on the level in the organization where the metric is being used. For the overall organization, financial metrics such as profitability, supply chain cost, overall inventory levels, and warehouse utilization rates, would be examples.

Question 36

Scorecards are literally nothing more than devices used to evaluate the performance of operations and organizations within supply chains.

Question 37

A benefit of using Balanced Scorecards is that they describe the cause-and-effect relationship of the strategic objectives.

Question 38

Scorecards are very valuable in assisting supply chain executives in making decisions and they are relatively easy to implement.

Question 39

One of the basic types of scorecards is the cost-based scorecard. This type of scorecard is the most widely used and attempts to quantify the total cost of doing business with a supplier over time.

Question 40

Balanced scorecards can only be used in large firms and are not feasible to be used by small organizations.