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Are we aligned with our customers on key business performance metrics?
All supply chain professionals aspire for a harmonious relationship with their business partners, especially with their customers. One of the key requirements of the harmony is clear alignment on how the business is performing. Do our perceptions match or do they differ?
I have discussed it with several supply chain teams and they don’t seem to have an issue. However, a little deep dive on KPIs reveals the truth. Let me illustrate.
OTIF is an important KPI tracked by several supply chain teams. It is particularly important for the Modern Trade and e-Commerce channels as they often insist on a minimum threshold value. The OTIF calculation is pretty simple and unambiguous… did we fulfil the customer order in time and in full?
The quantity delivered and timing of delivery are hard facts, recorded by both the parties. Therefore, OTIF reported by vendor and customer should match, isn’t it? Just check it out for yourself. My discussion with several leading companies indicates that the figures rarely match and these have to be reconciled after long and sometimes heated discussions.
This is just an illustration. There are several areas where the gaps exist, which are sort of blind spots for the teams. We will do well to listen better to each other and get to a common understanding on these important points for a harmonious relationship.