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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

Supplier Quality Metrics

Four helpful indicators of supply quality are:

  • perfect purchase order percentage (PPOP),
  • supplier fill rate (SFR),
  • supplier satisfaction index (SSI), and
  • matching rate of receipts and purchase orders.

Perfect Purchase Order Percentage

The perfect purchase order percentage (PPOP) is the percentage of all purchase orders that are delivered perfectly.  A perfect purchase order arrives on-time, without damage, with perfect documentation, at the right location, with each line item request completely satisfied with the correct item in the correct quantity.  This indicator should be closely monitored for each vendor and vendor location.  It is not unusual to find perfect PO percentages below 50%.

Supplier Fill Rate

Supplier fill rate (SFR) measures the percentage of demand satisfied by a vendor.  It can and should be measured as order fill, line fill, and unit fill.

Supplier Satisfaction Index

The supplier satisfaction index (SSI) is an overall indicator of a supplier’s performance incorporating a variety of factors typically including the elements of the perfect order percentage along with less quantifiable factors such as general responsiveness, honest, and service attitude.

PO to Receipt Matching Rate

The matching rate of receipts and purchase order records the percentage of receiving lines that match the delivery timing and quantities specified on the purchase order.

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