Metrics for Action in Demand-Driven Manufacturing Supplier relationships
Supplier metrics reflect how the supplier’s performance is impacting production. Supplier metrics are measured at the item, supplier and plant level.
Business Value to Demand-Driven Manufacturers:
These Supplier metrics help manufacturers drive just-in-time replenishment of quality parts to keep costs associated with inventory and waste down and keep production flowing.
A supplier’s On Time Delivery (OTD) rate reflects the percentage of deliveries received on the agreed upon date. OTD is calculated by:
OTD
= Sum of purchase order line items received on time
/ Sum of total purchase order line items
Action:
You want to keep your good suppliers – those that are providing quality materials on time and at a fair price. Reach out to help them find ways to align with your Demand-Driven Manufacturing strategy –and your OTD goals.
One option may be to implement an automated eKanban inventory replenishment system such as SyncKanban®, to delivers real-time replenishment signals to your suppliers through an online portal.
> Back to Top
Global Measurement
The Supplier Quality metric tracks the percentage of quality parts/materials received from a supplier. Supplier Quality is assessed according to:
Supplier Quality Rating
= Total number of parts received from the same supplier over a specified time period
/ Number of parts from a supplier that pass quality inspection
Action:
If a good supplier is falling below expectations, invite them to visit your facility to experience the issues you are having and work together – with your engineers – toward a solution. Your suppliers will appreciate the opportunity to help get it right.
> Back to Top
