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

Key performance indicators (KPIs) are essential metrics used in supply chain management to assess how effectively the supply chain is achieving its objectives. They help organizations quantify performance and track progress toward specific goals such as efficiency, delivery time, cost reduction, and overall operational effectiveness. By using KPIs, managers can identify areas that need improvement, make informed decisions, and align supply chain activities with broader business strategies.

These indicators often include metrics such as inventory turnover rate, order fulfillment times, and supply chain costs, which directly reflect the health and effectiveness of supply chain processes. Using KPIs to demonstrate achievement makes it clear how well the supply chain is performing and where adjustments may be necessary to meet the organization's objectives.

The other options, while they may be relevant in their own contexts, do not accurately represent the primary purpose of KPIs in supply chain management. Tracking employee satisfaction and customer feedback is important for overall business health, but these activities do not specifically measure the performance of the supply chain in relation to its stated goals. Similarly, evaluating finance team performance, while critical, is not directly tied to the supply chain's operational metrics and objectives. Therefore, focusing on KPIs provides a targeted approach to ensuring the supply chain operates effectively and aligns with the overall goals of