What are key performance indicators (KPIs) primarily used for in supply chain management?

Key performance indicators (KPIs) are essential tools in supply chain management, primarily designed to demonstrate supply chain performance. These metrics offer quantifiable measures that help organizations assess their efficiency, effectiveness, and overall health of their supply chain operations. By utilizing KPIs, businesses can monitor critical aspects such as order fulfillment rates, delivery times, cost efficiency, and customer satisfaction. This performance data allows organizations to identify areas of strength and opportunities for improvement, facilitating informed decision-making and strategic planning.

In contrast, while measuring employee satisfaction, evaluating compliance with regulations, or tracking inventory levels may be important factors within a business, they are not the core focus of KPIs in the context of supply chain management. KPIs are fundamentally about measuring performance outcomes and ensuring that the supply chain aligns with the company's strategic objectives. Therefore, the choice that highlights the role of KPIs in showcasing supply chain performance aligns perfectly with their intended purpose.