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"Key performance indicators have really evolved over the years," says Miles. "In the past, departments were very stove-piped in their use of KPIs. No one was taking a broad view across the supply chain, but more recently we are seeing companies tying their departmental KPIs together into single enterprise goals."
Order to cash and days of inventory are examples of two overall metrics that drive coordination between departments and that focus on a company's bottom line rather than departmental functions, she says.
These KPIs indicate that departmental professionals are not just thinking about logistics or manufacturing, but are looking at the big picture and how they can work collaboratively with partners, says Miles. "This shows that the field is maturing."
Technology has kept pace and, in some cases, helped drive this change. "Just as we previously had stove-pipe functions," says Miles, "now we have systems and applications that can span across functions and interact more with each other."
Miles says another trend is to ship goods direct from origin to consumers, which has increased demand for greater visibility of inbound shipments. "The end customer wants to know what is coming their way and if there are any exceptions - anything that is happening at origin or in transit that could cause a delay in the shipment," she says. "One of the big arguments for supply chain visibility is that it takes out variability. With less variability, you have a more predictable ETA, which builds confidence in the supply chain and allows you to take out buffer time and buffer inventory, freeing up working capital," she says. "These are ways that our customers are looking to remove inefficiencies."
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