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Measuring The Supply Chain Performance Through KPI

This paper discusses measuring supply chain performance through identifying and evaluating key performance indicators (KPIs) of inventory in the supply chain. The authors developed a theoretical framework focusing on inventory aspects and applied it to develop an optimized inventory system for a ceramics company in Bangladesh. They calculated the economic order quantity and number of orders per year for raw materials. Taguchi analysis was used to determine optimal levels for factors to maximize productivity. ABC analysis classified defects by their occurrence percentages, identifying the most common issues. The paper aims to identify major inventory KPIs but notes the success of implementation is uncertain.

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Ahmed Araby
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21 views1 page

Measuring The Supply Chain Performance Through KPI

This paper discusses measuring supply chain performance through identifying and evaluating key performance indicators (KPIs) of inventory in the supply chain. The authors developed a theoretical framework focusing on inventory aspects and applied it to develop an optimized inventory system for a ceramics company in Bangladesh. They calculated the economic order quantity and number of orders per year for raw materials. Taguchi analysis was used to determine optimal levels for factors to maximize productivity. ABC analysis classified defects by their occurrence percentages, identifying the most common issues. The paper aims to identify major inventory KPIs but notes the success of implementation is uncertain.

Uploaded by

Ahmed Araby
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Proceedings of the 1st International Conference on Industrial & Mechanical Engineering and Operations Management

Dhaka, Bangladesh, December 23-24, 2017

Paper ID E7

Measuring the Supply Chain Performance through KPI


Identification and Evaluation

Rezwanul Islam, Ahmed Zaman, Antara Biswas, Mohammad Morshed and Shyamal Biswas
Industrial and Production Engineering
Department of Mechanical and Production Engineering
Ahsanullah University of Science and Technology
Dhaka, Bangladesh
[email protected], [email protected],
antaramou3@gmail,com, [email protected],
[email protected]

Abstract

Supply chain management has become one of the most discussed topics in business literature. To get the
performance desired from supply chain, it requires continuous measuring and monitoring the supply chain
Key Performance Indicators (KPIs). The purpose of this paper is to develop a model to identify and evaluate
the KPIs of inventory in supply chain. The theoretical framework, focusing on inventory aspects when
measuring supply chain performance, was formed and used in order to develop a new inventory system for
measuring performance. The study has been conducted at Paragon Ceramic Industry in Gazipur. KPI is
used to determine the crucial factors that can be improved. Based on all the information gathered, Taguchi,
ABC and EOQ analysis have been applied which can be utilized as a plan to map the future state and
maximum optimized inventory system. The economic order quantity for raw materials is 565ton per
order and the economic number of order is 15 orders per year. It means if the company orders their raw
materials 15 times in a year it will be convenient for them. This process will be the same for the
othermaterials as well. Taguchi proposes optimum levels for each factors to increase productivity where
the factor levels corresponding to the highest S/N ratio were chosen to optimize the condition. Such as for
the first factor of inventory raw materials, the larger S/N ratio was at level 2, so level 2 was chosen for the
first factor which was sourcing. Rest of the factor’s levels were chosen in the same way. The factors should
be kept at those recommended levels for optimized and improved inventory performance. ABC analysis is
done based on defective items due to classify the defects depending on the amount of defects. ABC analysis
helps to identify major defects depending upon their occurrence percentages such as bending has the
maximum occurrence percentage (31.4%) which is classified as A class and air defect has the minimum
occurrence percentage (2.2%) which is classified as C class. This paper identifies the major defects in the
ceramics industry. However, before being properly implemented the success of the measures is uncertain.

Keywords
KPI, Inventory, Supply chain, performance measurement, Taguchi

© IEOM Society International

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