10 Great Supply Chain OKR Examples

Category: Supply Chain OKRs.

Supply chain management involves a chain of processes that enable value addition in the conversion of raw materials into finished goods. Discovered in Germany, the term ‘supply chain management’ hasn’t undergone many changes in its definition since the 1990s. It involves several channels, middlemen, processes, machinery, manual labour and net working capital which aid in the completion of raw materials into goods of value.This process augments the processing efficiency by controlling the average time taken to manufacture and produce finished materials. These goods, in turn, need to be sent through several distribution networks to the final consumers.

An analysis of the supply chain of a company can solely determine the efficiency of operations, probable losses, contingent liabilities and would also help in taking relevant management decisions. Being such a significant process, using OKRs with respect to the supply chain can definitely assist in greater profitability and operational efficiency in an organization.

While engineering OKRs can greatly give an entire new perspective to the management of a company’s engineering department. Setting the right Supply chain OKRs can often be confusing. So, here we’re going to list out some of the best supply chain OKR examples that you could use to manage the supply chain department of your company. When these objectives meet your key results, we assure you that you would have the reputation of managing the performance of your company’s supply chain in the best way.

Be prepared to implement your OKRs based on these 10 objectives to attain effective performance management of all your supply chain needs.

#1: Inventory Management

Description: While managing your inventory, you may often be left with excess stock in the warehouse or face scarcity of available raw materials. Therefore, it is important to optimize the stock order process to have a successful supply chain.

objective-circle-icon1Objective

David Griffin

Maintain optimal inventory

41%

Target Date: Annual-2021

Visibility: All Employees

key-icon1Key Results

Decrease order processing time from 48 hours to 24 hours

Q1-2021 decrease kpi1 Order processing time
48 Hour(s) 24 Hour(s) 42 Hour(s)

25%

Reduce lead time for reorder level during the high season in Q4 from 7 days to 5 days

Mar 2021 – Sep 2021 img-roger-smith-assignee1 decrease kpi2 Lead time
7 Day(s) 5 Day(s) 6 Day(s)

50%

Reduce customer backorder rate from 3% to 1%

Annual-2021 img-alice-assignee1 decrease kpi3 Customer backorder rate
3 1 2

50%

#2: Inventory Management

Description: Theft or pilferage of inventory may seem unavoidable when the quantity of stock is enormous. But, measures can be taken to minimize such potential losses, however trivial they may seem to be.

objective-circle-icon2Objective

David Griffin

Reduce material losses

33%

Target Date: Annual-2021

Visibility: All Employees

key-icon2Key Results

Increase number of cameras inside the stock godown from 4 to 10 to cover all possible angles for identification of theft

Feb-2021 img-jack-assignee1 increase kpi1 Number of cameras
4 10 5

17%

Increase training in safe handling of materials from once a year to 4 times a year

Jun 2021 – Sep 2021 increase kpi2 Frequency of manual stock taking
1 4 2

33%

Decrease losses due to poor temperature control from 2% to 0%

Annual-2021 img-alice-assignee2 decrease kpi4 Reporting time
2% 0% 1%

50%

#3: Delivery and logistics

Description: Delivery and logistics in a supply chain is composed of various functions. But certain metrics can determine the efficiency of the overall department. This objective focuses on improving shipping and freighting.

objective-circle-icon3Objective

David Griffin

Improve the efficiency of shipping and freighting functions

16%

Target Date: Annual-2021

Visibility: All Employees

key-icon3Key Results

Increase perfect order rate from 92% to 99.5% in Q1

Q1-2021 img-benny-powell-assignee1 increase kpi3 Perfect order rate
92% 99.5% 93.1%

15%

Increase freight bill accuracy rate from 93% to 99.5% in Q1

Q1-2021 img-bertram-assignee1 increase kpi4 Freight bill accuracy rate
93% 99.5% 94.5%

18%

Decrease shipping and freight cost per unit from $4 to $3

Q1-2021 img-bertram-assignee2 decrease kpi5 Shipping and freight cost per unit
$4 $3 $3.85

15%

#4: Delivery and Logistics

Description: Transportation plays an important role in delivering the goods to the intermediaries as well as end users. It is essential to deliver the goods without compromising on the quality as well as time.

objective-circle-icon4Objective

David Griffin

Improve delivery time for customers dramatically

25%

Target Date: Annual-2021

Visibility: All Employees

key-icon4Key Results

Decrease the average number of hours for transporting goods from the warehouse to the wholesaler from 15 hours to 12 hours by Q2

Annual-2021 img-bertram-assignee3 decrease kpi6 Time taken to reach wholesaler
15 Hour(s) 12 Hour(s) 14 Hour(s)

33%

Increase on-time shipping rate from 87% to 95%

Annual-2021 img-benny-powell-assignee2 increase kpi5 On-time shipping rate
87% 95% 89.1%

26%

Increase the number of orders undertaken for 24 hours delivery from 20% to 50%

Annual-2021 img-benny-powell-assignee3 increase kpi6 Number of orders undertaken
20% 50% 25.2%

17%

#5: Delivery and Logistics

Description: Great logistics services can satisfy the customers easily. But the question is whether the performance of the logistics services is being done effectively. This objective focuses on improving customer satisfaction through the improvement of logistics services.

objective-circle-icon5Objective

David Griffin

Improve customer satisfaction

19%

Target Date: Annual-2021

Visibility: All Employees

key-icon5Key Results

Provide end to end Traceability of delivery.

Annual-2021 img-roger-smith-assignee2 milestone tracked1 Track the Logistics
0% 100% 25%

55

25%

Decrease late delivery rate from 20% to 2%

Q1-2021 img-jack-assignee2 decrease kpi7 Late delivery rate
20% 2% 18.3%

9%

Decrease time for resolving online customer delivery queries from 180 mins to 30 mins

Annual-2021 img-alice-assignee3 decrease kpi8 Time taken to resolve queries
180 Min(s) 30 Min(s) 158 Min(s)

15%

Decrease customer call back response time from 5 hours to 1 hour

Annual-2021 img-alice-assignee4 decrease kpi9 Customer call back time
5 Hour(s) 1 Hour(s) 4 Hour(s)

25%

#6: Purchase department

Description: Purchase department carries out major functions in a supply chain like the timely delivery of required materials for further processing. Also, this department directly deals with the suppliers. It is important to set good OKRs in the purchase department for a great supply chain.

objective-circle-icon6Objective

David Griffin

Improve performance of purchase department

17%

Target Date: Annual-2021

Visibility: All Employees

key-icon6Key Results

Decrease average supplier defect rate from 2% to 0.25%

Q1-2021 img-benny-powell-assignee4 decrease kpi10 Supplier defect rate
2% 0.25% 1.87%

7%

Decrease emergency purchase ratio from 5% to 3% per quarter

Q1-2021 decrease kpi11 Emergency purchase ratio
5% 3% 4.8%

10%

Decrease the average purchase order cycle time from 5 days to 2 days

Annual-2021 img-adams-assignee1 decrease kpi12 PO cycle time
5 Day(s) 2 Day(s) 4 Day(s)

33%

#7: Manufacturing and Production

Description: The manufacturing and production department in every supply chain needs to have frequent quality control checks and inspections to see whether the goods produced fulfil the requirements of the organizational standards.

objective-circle-icon7Objective

David Griffin

Improve manufacturing and production efficienc

14%

Target Date: Annual-2021

Visibility: All Employees

key-icon7Key Results

Increase employee utilization rate from 95% to 99%

Q1-2021 img-benny-powell-assignee5 increase kpi7 Employee utilization rate
95% 99% 95.5%

13%

Decrease production run setup time from 25 minutes to 20 minutes

Q1-2021 img-roger-smith-assignee3 decrease kpi13 Production run setup time
25 Min(s) 20 Min(s) 24 Min(s)

20%

Increase manufacturing capacity utilization rate from 70% to 80%

Q1-2021 increase kpi8 Manufacturing capacity utilization rate
70% 80% 70.8%

8%

#8: Operational efficiency and environmental sustainability

Description: While minimization of costs and maximization of profit turn out to be the major goals of organizations, environmental sustainability of operations is often ignored. It is essential to make sure that the operations of an organization do not become environmentally hazardous.

objective-circle-icon8Objective

David Griffin

Include sustainability as a facet in supply chain operations

22%

Target Date: Annual-2021

Visibility: All Employees

key-icon8Key Results

Increase Sustainability index from 70% to 90%

Annual-2021 img-jack-assignee3 increase kpi9 Sustainability index
70% 90% 76.9%

35%

Reduce carbon inefficiencies from 8% to 3% in a year

Annual-2021 img-roger-smith-assignee4 decrease kpi14 Carbon inefficiencies
8% 3% 7.1%

18%

Reduce waste from “recycle-reuse-refurbish” materials from $500K to $100K in a year

Q1-2021 img-bertram-assignee4 decrease kpi15 Value of recycled materials
$500K $100K $445.83K

14%

#9: Purchase Department

Description: Even if inventory management operates efficiently, they can base their data only on the forecasts made by the purchasing department. Therefore, it is important to ensure that the forecasts are predicted accurately.

objective-circle-icon9Objective

David Griffin

Develop forecast accuracy in supply chains

22%

Target Date: Annual-2021

Visibility: All Employees

key-icon9Key Results

Reduce maximum variance from actuals on Order forecast from 6% to 0.25% in Q1

Q1-2021 decrease kpi16 Maximum variance from actual data on order forecast
6% 0.25% 5.09%

16%

Reduce maximum variance from actuals on the Material forecast from 13% to 5% in Q1

Q1-2021 img-roger-smith-assignee5 decrease kpi17 Maximum variance from actual data on materials forecast
13% 5% 11.26%

22%

Reduce mean absolute percent error from 11% to 4% in Q1

Q1-2021 img-adams-assignee2 decrease kpi18 Mean absolute percent error (MAPE)
11% 4% 9.1%

27%

#10: Supply Chain Risk Management

Description: Supply chain consists of various sub processes and is an all inclusive design that may give rise to frequent situations with unexpected outcomes. This objective focuses on how to manage such risks in the supply chain.

objective-circle-icon10Objective

David Griffin

Reduce vulnerabilities to exogenous shocks across the entire supply chain

32%

Target Date: Annual-2021

Visibility: All Employees

key-icon10Key Results

Deploy existing data and use simulation to identify possible negative outcomes

Q1-2021 img-bertram-assignee5 baseline kpi1 Number of negative outcomes
0% 100% 20%

5555

20%

Creation of optimization routine and scenario-based supply chain model

Q1-2021 img-benny-powell-assignee6 baseline kpi2 Optimizing scenario based supply chain models
0% 100% 35%

5555

35%

Increase digitalization of the entire supply chain from 75% to 90% by Q1

Q1-2021 img-benny-powell-assignee7 increase kpi10 Digitalization of supply chain processes
75% 90% 81%

40%

Conclusion

Improving the organizational supply chain process with such OKRs can contribute a great way towards building brand awareness, customer loyalty, reputation as well as increase the profitability of the organization. Every step of the manufacturing process or retail process should be linked directly with the supply chain in order to obtain the desired results. Try implementing these OKRs in your company’s supply chain to improve the performance of your employees, tangible assets and other resources. Try reading some of the other great OKR examples on Customer experience OKRs, Banking OKRs,Sales OKRs, Marketing OKRs, HR and Engineering OKRs.

 

 

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