FAQs (Frequently Asked Questions) On Supply Chain Dashboards
If you do not KNOW what you know, you cannot act on it. The best way to get to know something is by having accurate information available to you in a timely and easily readable manner.
That is where dashboards come in. We find most dashboards in supply chains are inadequate for a number of reasons - some of which we will discuss below in the FAQs.
Here are the frequently asked questions (FAQs) on supply chain dashboards.
Why we are qualified to write this list of FAQs on supply chain Dashboards
VERY FEW PEOPLE KNOW SUPPLY CHAINS LIKE WE DO - retail, beverages, food, milk, dairy, meat, livestock, explosives, chemicals, cotton, rice, graphite, solar power, natural gas, crude oil, fertilizers, electronics, packaging, glass manufacturing, machine parts, automobiles, industrial goods, mining, etc are just some of the industries where boards and executives have benefited from our proprietary knowledge of the supply chain analytics.
Since when few had heard of supply chain, our co-founder Vivek Sood has been considered one of the most authoritative professionals in the field when it comes to the subject of supply chain analytics in Australia, Asia, North America, South America and Europe.
He has written four seminal books about restructuring supply chains to gain massive advantage in business. He also regularly delivers keynote speeches at business schools and conferences such as University of Technology Sydney, Supply Chain Asia, Asian Bankers Forum, APEC Business Advisory Council.
He has been quoted in the authoritative business press and over 100 academic papers written by supply chain researchers around the world. Vivek and his team have examined thousands of supply chains during their projects over the last three decades and helped hundreds of executives build safe, cost effective and sustainable supply chains and careers.
supply chain Dashboards - FAQs
Just like a dashboard on the car gives you most important information about your journey at a glance, supply chain dashboard is an information management tool that visually tracks, analyzes and displays key performance indicators (KPI) that are relevant to your role in the supply chain at that moment.
A good dashboard takes into account many factors to make itself useful to you. We will discuss many of these factors in the next few questions.
An overwhelming amount of data is created in supply chain. Imagine five flows of supply chain with hundreds of nodes and dozens of players handing off material, information, money, risk and value to each other at every point in time and space within the supply chain.
All these flows much be measures, calibrated, managed and harnessed to maximise your outcome from the supply chain.
No human has the brain power to process all this data simultaneously. Not even computers can process them adequately, even now. With the current limitations of the computing power, bandwidth and human cognitive capability, we have to design and empower a dashboard which gives the user just the right information at the right time, at the right place.
Dashboards are important in the success of the company because though behind the scenes, a dashboard connects to all your relevant data sources - your files, attachments, services and API’s, but on the surface it displays the simplest and easiest to understand dials, tables, line charts, bar charts and gauges.
A supply chain dashboard is also the most efficient way to track multiple data sources because it provides a central location for businesses to monitor and analyze performance. Real-time monitoring reduces the hours of analyzing and a long line of communication that previously challenged supply chains.
As we have already seen in the FAQs about supply chain management, there are four levels of activities in supply chains. These are shown in the figure below:
At each of the four levels, the dashboard would change dramatically to be able to show just the right amount of details (breadth and depth) and no more.
Let us take a few examples to make this come alive. If you are in the bottom left corner, working as a purchasing officer your key measure of work would be something like how many purchasing orders (POs) did you process within a work day. You have to go through a series of steps before you can process these orders and you have to be able to do so accurately. So accuracy and completeness are two additional measures. Finally, your internal customers are likely to be manufacturing (users of the material you buy), and finance (dispenser of the money you spend). They have to be happy with your performance. If you do all this satisfactorily day after day - your boss is likely to be happy and pay you an extra Christmas bonus. Your personal dashboard is likely to include dials related to these six KPIs.
The person in the box above you, your boss the purchasing manager (or analyst) will have a wider, but less detailed view of the world in his dashboard. He might see how many orders were processed in the entire week (rather than the day) by his whole team (rather than one person). He will also start seeing the material requirement planning data, triggering these orders and how well the two move in lock step with each other. He will have an ability to drill down and assess the individual performance of each of his team members.
His next higher boss, the purchasing director, or procurement head would have a more tactical dashboard. She would only see a more aggregated picture of a much broader and deeper set of data. Same hierarchical dashboard flow will occur in all other supply chain verticals such as logistics, manufacturing, dispatch, transportation, warehousing, delivery and customer support.
The four key types of dashboard you will need to create in supply chains are
- Strategic supply chain dashboard
- Tactical supply chain dashboard
- Operational supply chain dashboard
- Executional supply chain dashboard
Look at the top of the pyramid in the diagram in the last answer. Now think about the six must-track dials that the CEO, the board of directors, and the key executive team (CEOs direct reports) must focus on every moment of their time.
This is no different than the six dials right in front of the pilot of a fighter jet that s/he focuses on every second s/he is flying this aircraft.
Why six dials - because a long time ago cognitive scientists have determined that is the most amount of information that human brain can focus on become becoming overwhelmed. Less than six is better - but that is rarely going to be the case.
What are those six dials?
That will depend on your company, its overall business strategy, its supply chain strategy and the current performance on the key strategic measures. We are not going to be prescriptive here and tell you which six KPIs every board should measure.
The “business dashboard” specifically refers to reporting tools that fulfil these purposes:
• Tracking important supply chain metrics
• Monitoring business intelligence initiatives
• Reporting data to stakeholders
An effective business dashboard should focus on top-level data related to the overall success of the business. In most cases, every metric in the dashboard should support the business’ most important metric: the bottom line. The goal of a business dashboard is to not only communicate data about the business’ success in the supply chain, though; it facilitates understanding ad alignment between departments in the supply chain, holds each team accountable for their goals and progress, and helps users identify areas that need immediate action.
Now imagine the dashboard one level down from the top of the pyramid as shown in the figure in the answer 3 above. Clearly the focus of the executives has changed from overall business performance to a more narrow subset - such as demand planning, supply planning, procurement planning, sales and operations planning, and, inventory planning.
Clearly the business has to somehow ensure that each of these planning processes happen, are performed well enough, and create the desired results.
A sad reality is that if none of these planning activity happen at all for a period of 3-5 months very few people in any business would even notice the absence of these activities. Only after that someone will start noticing that due to lack of tactical planning the business is constantly fire-fighting and lurching from one operational crisis to the other.
Similarly, if these planning activities happen poorly, people would not notice for years till someone comes along from another company where these planning activities were done in a much better manner.
When configuring the tactical supply chain dashboard, the key question to ask in each case would be the same - what six dials in each case would make sure that the people doing these jobs are doing it as well as it could be done, and how will they know instantly if they are not doing that job well enough.
Again, in this answer as well, we are not going to be prescriptive and give you the answer to this key question for the simple reason that the six dials tat fit one situation may not fit another - plus it will be like giving matchstick to the wrong being.
We encourage you to think relentlessly and create your own dashboards for each tactical situation and review them frequently to make sure they fit in with the current business situation.
When most people here supply chain dashboard, they automatically jump to KPI dashboards or operational dashboards. These are also the most common, and most generic dashboards used by the supervisors to measure the performance of operators in logistics, transportation, warehousing, purchasing, manufacturing etc.
We have already given an example from the purchasing department in answer 1 above. You can apply the same logic for every other part of the supply chain and easily configure this dashboard.
Supply chain KPIs (Key Performance Indicators) are the heart and soul of your supply chain management performance. They are the stepping stones that will guide your business to long-term success, so tracking and comparing them in one place is vital. KPIs should be measurable, tangible metrics that let each employee, team, and department understand how their performance influences the success of the supply chain management – and your KPI dashboard is where these metrics are stored.
Yes, technically these two supply chain dashboards show Key Performance Indicators (KPIs) appropriate to the level they are configured for.
Yet executional dashboards differ from operational supply chain dashboards.
Think of an assembly line inside a factory. A worker at one of the workstations will measure just the performance of of his own workstation while the supervisor of the entire assembly line for the shirt will measure the performance of the entire shift.
The six dials that will measure the performance of that one workstation will look very different that the six dials that will measure the performance of the entire assembly line for that shift.
The first one would allow the worker (perhaps in conjunction with her boss) to determine where to focus their attention and effort in order to not drag the chain. The latter would allow the supervisor (perhaps in conjunction with their boss) to determine which parts of the assembly line are dragging the chain so that they can dig deeper with the worker on that workstation.
In real life, most dashboards are a combination of the operational and executional dashboards. Think of them as a mish mash of KPIs most relevant and visible at the operational level. That is one of the reasons why the smartest executives quickly lose interest in these type of dashboards.
The reason most executives lose interest in the dashboards over a period of time are twofold:
- Irrelevance - most of the real life dashboards focus too much on nitty gritty measures from operational and executional level. If an executive has to jump that far down to sort out operational problem then there is generally something wrong in the chain of command structure or process, and the executives have far bigger problems to worry about.
- Overwhelm - what starts as a simple few dial executive dashboard, quickly degenerates into a mishmash of operational and executional KPIs. Once a KPI enters the score card due to temporary emergency of some kind - it becomes a permanent fixture for ever.
If you put a dashboard from a car on a fighter jet, clearly the pilot will stop referring to it quickly, and start flying by the feel - especially if s/he is an experienced pilot.
That is exactly the problem you are trying to solve here. Think like a pilot, and design a dashboard suitable for a pilot before you ask him to fly the jet.
To think about the most relevant KPIs for the executive, think about what s/he is trying to achieve in or through the supply chain. Then think about how to measure that achievement.
It is not easy to come up with the most relevant measures that executives will buy-into readily. You may have to keep trying till you succeed.
Try and solve this problem only after you have already spend sufficient time solving the first problem in the above question. Once you have achieved a good measure of relevance, cut down the number of dials or KPIs to bare minimum.
In our projects we use two devices to achieve this:
- Board presentation test: you are presenting to the board of directors and have only two slides with a maximum of three points on each slide. What will you show on those two slides.
- Fighter pilot test: The plane is flying at mach 3 speed, and the pilot has an attention span of less than 0.5 seconds. How can you design a dashboard so the pilot can win the dogfight with the rivals, and safely land the plane.
This sounds simple, but believe me - in practice this is even more difficult than achieving relevance.
When a fighter pilot wins a dog fight in the sky - what is it that wins it? The pilot, the plane, or the dashboard?
Clearly, it is bit of everything - including luck.
Naturally, to the vendors of the tools used in making the dashboards (or any other kind of tools, including the fighter planes) the only thing that matters is the tool. In their minds the pilots are either dispensable, or all equally good. If that was the case, superior machine would have always won in every contest.
There are many software tools available to make dashboards among them the Microsoft Excel, Tableau and Power BI are most used and effective. We are currently preparing a definitive guide on supply chain dashboards - which will talk a lot more about these tools.
The following figure shows typical steps followed in making a dashboard in a supply chain scenario:
We are currently preparing a definitive guide on supply chain dashboards - which will talk a lot more about these tools.
Global supply chain group's definitive guide on supply chain dashboards
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Notes on FAQs
Clearly, any such list of frequently asked questions (FAQs) about supply chain can never be fully exhaustive. Neither is anyone, including us, the final authority and arbitrator on this or any other topic.
You will have your own opinions on many of these topics, and will have many other questions.
We throw open the comments section to you for your opinions and questions. We will try to address all of these, and the best ones will attract a reward in the form of one of our books, or publications.