International School of Business & Media, Pune

MANAGEMENT INFORMATION SYSTEM – GROUP PROJECT

Identification of KPIs

of

various Sub-Departments of a particular Department in a particular Sector/Industry.

Submitted By –

Anshuman Pradhan N20222010

Nishit Shah N20221046

Prapti Jain M20222072

Shubham Jindal N20224012

Priya Maheshwari M20223062

Submitted To- Prof. Jayant Vishnu

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Problem Statement : Identification of KPIs of various Sub-Departments of a particular
Department in a particular Sector/Industry.

Solution :

Sector : FMCG Manufacturing

Department : Supply Chain Department

Sub-Departments :

1. Procurement:
• Sourcing: Responsible for identifying, evaluating, and selecting suppliers for
raw materials, packaging, and other goods and services.
• Commodity Management: Focuses on managing the procurement of specific
commodities, such as agricultural products or chemicals, to ensure cost-
effectiveness and security of supply.
• Contract Management: Ensures that contracts with suppliers are negotiated,
executed, and monitored effectively.
2. Logistics:
• Inbound Logistics: Manages the transportation and storage of raw materials
and other goods from suppliers to manufacturing facilities.
• Outbound Logistics: Oversees the transportation and distribution of finished
products from manufacturing facilities to warehouses, distributors, and
ultimately, customers.
• Warehouse Management: Responsible for the efficient operation of
warehouses, including inventory control, order fulfillment, and shipping.
3. Planning & Inventory Management:
• Demand Planning: Forecasts future demand for products and raw materials to
ensure optimal inventory levels.
• Inventory Management: Controls the amount and location of inventory to
minimize costs and ensure product availability.
• Production Planning: Develops production schedules and plans to meet
demand efficiently.

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 4. Other important sub-departments:
• Quality Management: Ensures that products and processes meet quality
standards.

Sub-Department Decision Parameters and Data :

E-R Diagram :

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Sub Department KPIs :

1. Demand Planning:
• Forecast accuracy: Measures how closely forecasts match actual demand, indicating
planning effectiveness.
• Forecast bias: Identifies systematic over- or underestimation in forecasts, prompting
adjustments.
• Demand variability: Measures the fluctuation in demand, helping plan for potential
surges or dips.
• Service level: Measures the percentage of customer orders fulfilled on time and
complete, reflecting customer satisfaction.

2. Sourcing:
• Cost per unit: Tracks the total cost of acquiring a single unit of raw material or
ingredient, affecting production costs.
• Supplier quality score: Assesses the reliability, performance, and sustainability
practices of suppliers.
• On-time delivery rate: Measures the percentage of deliveries received from suppliers
on schedule, impacting production planning.
• Lead time: Measures the time it takes to receive materials from suppliers after placing
an order, impacting inventory management.
• Total cost of ownership (TCO): Considers all costs associated with a supplier, not just
the initial purchase price.

3. Commodity Management:
• Price volatility index: Measures the fluctuation in the price of key commodities,
helping manage risk and optimize purchasing decisions.
• Hedging effectiveness: Evaluates the success of strategies used to mitigate price
fluctuations for certain commodities.
• Sourcing diversification ratio: Measures the reliance on different suppliers for the
same commodity, reducing risk of disruptions.
• Supplier risk score: Assesses the potential risks associated with individual suppliers,
such as financial stability or political instability.

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4. Contract Management:
• Contract compliance rate: Measures the percentage of agreements adhered to by both
parties, ensuring smooth operations.
• Contract negotiation cycle time: Measures the time it takes to finalize a contract with
a supplier, impacting efficiency.
• Dispute resolution rate: Measures the effectiveness of resolving disagreements with
suppliers in a timely and fair manner.

5. Quality Management:
• Defect rate: Measures the percentage of finished products that do not meet quality
standards, impacting production costs and customer satisfaction.
• First-pass yield: Measures the percentage of products that pass quality checks the first
time, indicating production efficiency.
• Customer complaints: Tracks the number of customer complaints related to product
quality, helping identify and address issues.
• Corrective action implementation rate: Measures the effectiveness of addressing
identified quality problems and preventing their recurrence.

6. Inbound Logistics:
• Transportation cost per unit: Tracks the cost of transporting raw materials and
ingredients per unit, influencing overall supply chain costs.
• On-time in full (OTIF) delivery rate: Measures the percentage of deliveries received
from logistics providers complete and on schedule.
• Customs clearance lead time: Measures the time it takes to clear imported materials
through customs, impacting production planning.
• Inventory carrying cost: Represents the cost of holding inventory, including storage
fees, insurance, and potential obsolescence.

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7. Warehouse Management:
• Warehouse utilization rate: Measures the percentage of available warehouse space
being used for storage, impacting efficiency and potential cost savings.
• Picking accuracy rate: Measures the percentage of orders picked and packed correctly,
ensuring order fulfillment accuracy.
• Order fulfillment lead time: Measures the time it takes to process and prepare an order
for delivery.
• Inventory turnover ratio: Measures how often inventory is sold and replaced within
a specific period, indicating inventory efficiency.

8. Production Planning:
• Production efficiency: Measures the amount of output achieved compared to the
resources used, indicating how well production processes are utilized.
• Capacity utilization: Measures the percentage of available production capacity that is
being used, identifying potential for optimization.
• Schedule adherence: Measures the extent to which production follows the planned
schedule, impacting delivery timelines.
• Changeover time: Measures the time it takes to switch production between different
products, impacting production flexibility and cost.

9. Inventory Management:
• Inventory accuracy: Measures the degree to which physical inventory records match
actual stock levels, crucial for effective planning and order fulfillment.
• Stockout rate: Measures the percentage of times a product is unavailable due to
insufficient inventory, impacting customer satisfaction and sales.
• Inventory carrying cost: As mentioned in Inbound Logistics, represents the cost of
holding inventory.
• Safety stock level: The minimum amount of inventory kept on hand to mitigate the risk
of stockouts due to unexpected demand fluctuations or supply disruptions.

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10. Production:
• Downtime percentage: Measures the percentage of time production equipment is not
operational due to maintenance, repairs, or other reasons, impacting productivity.
• Product quality: As mentioned in Quality Management, refers to the degree to which
finished products meet established standards.
• Production output: Measures the total quantity of products produced within a specific
period.
• Production cost per unit: Tracks the direct and indirect costs associated with
producing a single unit