Amanda OPS

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Royal Melbourne Institute of Technology *

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OMGT 2228

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Industrial Engineering

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Oct 30, 2023

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Performance measurement is essential for Walmart and Boeing Distribution Service (BDS) to measure, control, and evaluate their supply chain performance. Supply chain performance measurement metrics consist of service, assets, and speed. “Every supply chain should have at least one performance measure on these three critical dimensions” (Hausman 2004). In order for a company to measure performance, indicators or metrics are needed. These indicators serve three fundamental purposes for the organisation: control, communication, and improvement (Franceschini, 2007). It is imperative to guarantee that the metrics employed in supply chain evaluation encompass elements that encompass the expenses and advantages of the Internet, alongside the investments and advantages derived from other enhancements in supply chain operations. In alignment with the market alignment for Walmart and BDS that was already explained in the previous chapter, both companies can measure their supply chain performance in several ways. Table X below compares both companies’ KPIs, which they are using to measure their supply chain performance. Walmart’s KPI Boeing Distribution Service’s KPI Forecast accuracy Perfect Customer Order Fulfilment Supply Chain Responsiveness Suppliers Perfect Order Fulfilment: Quality policy for BDS Suppliers Perfect Order Fulfilment Inventory turnover Table X. Walmart and Boeing Distribution Service Supply Chain Performance Measurement Suppliers' perfect order fulfilment is one of the KPIs used by both companies. The definition of this KPI is “The percentage of orders from the supplier meeting delivery performance expectations, including complete and accurate documentation and no delivery damage” (APICS, 2023). A perfect order fulfils the 7 R’s: the right product/service, the right quantity, the right condition, the right place, the right time, the right customer, and the right cost (APICS, 2023). Both companies rely on the effectiveness of their supplier network to achieve their strategic goals and objectives. However, the ways for both companies to approach and achieve this KPI are different.

Walmart employs key performance indicators (KPIs) to assess the perfect order fulfilment of their suppliers. This evaluation commences with the measurement of suppliers' on-time delivery performance, denoting the suppliers' ability to deliver Walmart's orders promptly and within the designated time frame without any undue delays. Forecast accuracy = order agility https://scor.ascm.org/performance/agility/AG.2.1 Procter & Gamble has established a Vendor-Managed Inventory (VMI) arrangement with Walmart for the purpose of overseeing and restocking product inventory at Walmart's locations. Under this arrangement, Walmart delegates control over when and how much replenishment is needed to P&G, often with specified constraints on the permissible inventory levels at Walmart's sites. Furthermore, Walmart commits to providing P&G with sales data, particularly point-of-sale (POS) information, ensuring that the manufacturer remains well-informed about customer demand in real-time. Thanks to the Internet, the exchange of information throughout the supply chain takes place much more smoothly and efficiently (Hausman 2004).  bullwhip effect One way to moderate the periodic or aperiodic oscillation is to reduce inventory level, as suggested by Dejonckheere et al. (2003), which will help the system keep in a stable state. Another is to smooth the fluctuation of price. “Always low price” policy, in conjunction with low inventory level, has already been used at Asda and Wal-Mart in practice. More precise demand forecast with consideration of price factor is also an approach. Vender managed inventory (VMI) provides a good solution (Disney et al., 2004). What KPI is the same between both companies? Explain hpw both companies are going to achieve this APICS (American Production and Inventory Control Society) (2023) Perfect Supplier Order Fulfilment, ASCM website, accessed 20 October 2023. https://scor.ascm.org/performance/reliability/RL.1.2

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