How do performance metrics function in supply chain management?

Performance metrics play a crucial role in supply chain management by evaluating how well different processes and operations are functioning. By measuring efficiency and effectiveness, these metrics provide insights into various aspects of the supply chain, such as production rates, inventory levels, order fulfillment times, and delivery accuracy.

When performance metrics are applied, managers can identify areas that require improvement, streamline operations, reduce costs, and enhance service delivery. This data-driven approach enables organizations to make informed decisions that can lead to increased competitiveness and customer satisfaction. Therefore, understanding and utilizing performance metrics is essential for optimizing supply chain management.