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The document outlines the strategic sourcing process and categorizes quantitative measures into non-financial and financial types. Non-financial measures focus on operational efficiency, including customer service levels and order-to-delivery lead times, while financial measures encompass costs related to goods, penalties, and revenues. Key metrics such as order fill rate, stockout rate, and cycle time are also discussed to assess performance in supply chain management.

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Andrea Joyce Marquez
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5 views2 pages

Quiz Info

The document outlines the strategic sourcing process and categorizes quantitative measures into non-financial and financial types. Non-financial measures focus on operational efficiency, including customer service levels and order-to-delivery lead times, while financial measures encompass costs related to goods, penalties, and revenues. Key metrics such as order fill rate, stockout rate, and cycle time are also discussed to assess performance in supply chain management.

Uploaded by

Andrea Joyce Marquez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Understanding the Spend Category

• The first three steps involved in the strategic sourcing are carried out by the sourcing team

2 Types of Quantitative Measures

Non-Financial Measures

Non - Financial Measures

These focus on operational efficiency and effectiveness rather than monetary values.

CUSTOMER SERVICE LEVEL

a key performance metric in supply chain management that reflects how well a company meets
customer expectations.

• Order Fill Rate – The percentage of customer orders that are fulfilled immediately from
available stock without delays.
• Stockout Rate – The percentage of customer orders that cannot be fulfilled due to inventory
shortages.
• Backorder Level – The total number of customer orders that are pending because the item
is out of stock.

ORDER-TO-DELIVERY LEAD TIME

The time taken from when a customer places an order to when they receive the product.

• Supplier Lead Time – Time taken for suppliers to provide raw materials.
• Manufacturing Lead Time – Time to produce the item.
• Distribution Lead Time – Time to ship the item to warehouses or retailers.
• Order Management Time – Processing and handling the order.

CYCLE TIME

the total duration taken to complete a process from start to finish.

• Processing Time – Time spent working on a task.


• Inspection Time – Time spent checking quality.
• Move Time – Time spent transporting items.
• Queue Time – Time spent waiting.
2 Types of Quantitative Measures

Financial Measures

• Cost Of Expired Perishable Goods – Losses from items that become unsellable.
• Penalties for late or incorrect deliveries – Fines incurred from failing to meet customer
order requirements.
• Credits From Suppliers for Late or Incorrect Deliveries – Compensation received from
suppliers due to their errors.
• Cost of Goods Returned by Customers – Expenses related to returns and refunds.
• Credits for Goods Returned to Suppliers – Reimbursements obtained
• Cost of Raw Materials – Expenses incurred for sourcing essential inputs.
• Revenue from Goods Sold – Income generated from product sales.
• Activity-based Costs – Expenses related to material handling, manufacturing, and assembly
processes.
• Inventory Holding Costs – Costs of storing unsold goods, including
• Transportation Costs – Expenses associated with moving goods through the supply chain.

• Cost of raw materials.


• Revenue from goods sold.
• Activity-based costs like the material handling, manufacturing, assembling rates etc.
• Inventory holding costs.
• Transportation costs.
• Cost of expired perishable goods.
• Penalties for incorrectly filled or late orders delivered to customers.
• Credits for incorrectly filled or late deliveries from suppliers.
• Cost of goods returned by customers.
• Credits for goods returned to suppliers.

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