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Operations Article | Managing the Global Supply Chain

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Managing the Global Supply Chain: A Risk Measurement Perspective

- by Krishnakanth K. K. & Pankaj Ghai *

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Most of the companies also focus on the low-impact high frequency risks but not on the high impact low frequency risk. e.g. many global supply chains were badly exposed after the SARS epidemic or the 9/11 terrorist attack. Infact it is these events which have brought the spotlight on the risks in supply chains.

Supply Chain Performance Metrics7

Traditionally, companies have been using financial measures as the prime performance indicators. Financial measures such as profits alone may be insufficient in measuring supply chain performance because:

  • They tend to be past-oriented and rather than future-oriented

  • They do not relate to important strategic, non-financial performance parameters directly, e.g., like customer service levels and product quality

  • They do not provide a direct and tangible relationship to operational measures

    A variety of measurement approaches have been developed, including the following:

    The Logistics Scoreboard

    It has been developed by Logistics Resources International Inc. and recommends the use of an integrated set of performance measures from the following broad categories:

    Next

    7 Larry Lapide, "What About Measuring Supply Chain Performance?" http://lapide.ASCET.com.


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    * Contributed by -
    Krishnakanth K. K. & Pankaj Ghai,
    PGP Students.
    IIM Lucknow.

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