Scott Luton (00:00):
Here by Scott Luton with Supply Chain. Now welcome to this episode of Whiteboard Wisdom, where we’re going to be featuring my friend, outstanding practitioner and leader Marcia Williams, as she dives into five customer supply chain metrics that supply chain pros. You got to master, Hey, do you know oif? Do you know Net Promoter score? Do you know the order fill rate and how to calculate all these and more if you don’t tune in and let us know what you think.
Scott Luton (00:50)
Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton and special guest, Marcia Williams with you here today. Welcome to this latest edition of Whiteboard Wisdom here on supply chain now. Marcia, how are you doing
Marcia Williams (00:54):
Great, Scott. Pleasure to be here.
Scott Luton (00:58):
Hey, great to have you. Really enjoyed your perspective last time when we dove into inventory management metrics and today we got another great episode teed up here today, especially for our community on YouTube, we’re going to be featuring practical and efficient or practical and effective discussion on five customer supply chain metrics that every supply chain professional has got a master. Now folks, as y’all know, we’re an industry full of metrics, data, and acronyms. Today’s five metrics will cover here. I’m going to take this back at the top it quiet Amanda, I might need my 18th cup of coffee. I’m going to do this one more time, a little bit smoother here. Let’s see what tripped me up here.
Marcia Williams (01:43):
Did you need something
Scott Luton (01:43):
Practical and efficient? I’m just going to start back at the top practical
(01:47):
And hold on, lemme drop out effective discussion. And then there’s one other word that got me here. Today’s five metrics that we will be we’ll be covering. There we go. It’s always a couple words to get me. All right, here we go. Marcia, looking forward to it here we’ll chop off the front end as if it didn’t even happen. Here we go in three. Hey, good morning, good afternoon, good evening, wherever you may be. Scott Luton and special guest co-host Marcia Williams with you here today. Welcome to the latest edition of Whiteboard Wisdom here on supply chain. Now Marcia, how are you doing today?
Marcia Williams (02:30):
Great, Scott, it’s a pleasure to be here.
Scott Luton (02:34):
Well, hey, you hit a home run last time as we dove into inventory management metrics that folks got to know and so today got another great episode teed up here today, especially for our community on YouTube, we’re going to be featuring a practical and effective discussion on five customer supply chain metrics that every supply chain professional has got a master as know we’re an industry full of metrics and data and acronyms. Today’s five metrics that we’ll be covering are absolutely on a short list of items that every supply chain pro well, you just got to know. Now, before we move forward, a couple things I think first off, federal regulations require me to ask you to like and comment on this episode and if you enjoy the conversation, hey, share it with a friend, they’ll be glad you did. Sharing is caring, right, Marcia Sharing is caring. That’s
Marcia Williams (03:23):
Right.
Scott Luton (03:24):
Speaking of Marcia, let me introduce her background because I’ll tell you we’ve got quite a proven practitioner and leader here. So Marcia Williams serves as a managing partner at USM supply chain. She’s got 18 years of supply chain management experience, particularly with deep expertise in optimizing supply chain finance planning at a variety of mid-size and large companies for greater profitability and improved cash flows. Now, Marcia holds the MBA from Michigan State University. Go Spartans, right?
Marcia Williams (03:58):
Thank you.
Scott Luton (03:59):
I don’t want to get the wrong mascot, the proud Michigan State University, Spartan. She’s also a Forbes council contributor, a published author, and a recent TEDx talk speaker. So with all that said, let’s welcome in officially Marcia Williams to the show. Marcia, again, great to have you back with us. It’s been too long my friend.
Marcia Williams (04:19):
Thank you so much, Scott. It’s always a pleasure to be here. So I’m looking forward to talking about these key metrics
Scott Luton (04:30):
We are too. And again, these five customer supply chain metrics that every supply chain pro has got a master. So Marcia, where are we starting here today?
Marcia Williams (04:40):
We cannot start in a different way. We are going to start with tif. That is the key metric in supply chain. It means on time in full, so is fundamental and the calculation is the number of on time in full orders delivered divided by the total number of orders. Then we multiply by 100 to get the percentage. So this is a key metric and you may have heard about default that is the same. It’s just the difference is in the order, it means in full on time.
Scott Luton (05:28):
Love it. Now Marcia, I’ve seen it reported that some of the world’s largest retailers have moved their standard OTIF targets for their suppliers from 75% to in some cases 98% in recent years. Have you seen the same?
Marcia Williams (05:44):
Yes, because as we know, inventory is a challenge in retail today they have 23% up that what they used to have. So inventory management for retail is vital.
Scott Luton (06:05):
Alright, so folks, the first one on time in full oaf, you may hear folks say from time to time, where are we going with number two, Marcia
Marcia Williams (06:13):
Number two is another great metric because with tif, yes we know if we are meeting the customer requirement, but we are not sure about their satisfaction if they loved the experience. So that why we need another metric. And the metric here is net promoter score, that the calculation is the number of promoter scores divided by the total number of respondent, the respondent minus the number of detractors scores divided again by the total number of respondents. So here we see, we actually understand the customer and Scott, I watch an episode that you talk about this metric with L’Oreal and they mentioned that this is the key metric that they track.
Scott Luton (07:19):
It really is in fact, did you know folks out there since being introduced in 2003, the net promoter score, MPS, you may hear folks refer to the acronym now more than two thirds of the Fortune 1000 use NPS Marcia, how about that? Including the great folks at L’Oreal. Alright, two down, three more to go I think with number three, where are we going next? Marcia?
Marcia Williams (07:45):
Perfect order. And this one is a very demanding metric, but we can see everything, we track all the aspects. To get a perfect order, we need to get seven aspects right per the apix dictionary. So the seven aspects that they call them seven Rs are the right product, the right quantity, the right time based on the customer requirement, the right condition, the right place, the right customer, and the right cost. All of that plus the right documentation. That is when we get a perfect order.
Scott Luton (08:35):
Love it. Now Vince Lombardi, the hall of fame NFL football coach said one time perfection is not attainable, but if we chase perfection, we can catch excellence. Well I would say we might have a bone to pick with Mr. Lombardi because I bet he is never shipped any orders back in his heyday. So alright, the perfect order is number three, good stuff. Where are we going with our fourth metric here today, Marcia?
Marcia Williams (09:01):
The next one that we have is the order fill rate and sometimes is confusing with other metrics and the concept, but what it matter is the ability of the company to be able to deliver, to ship with the stock that they have available, that the stock, the own hand stock, the stock that they have physically without getting into back orders or delays. So that’s why the metric is critical because it also helps to improve the internal operations. And the calculation is the number of orders fulfilled immediately with the stock on hand divided by the total number of orders
Scott Luton (09:58):
Outstanding. And as we start to wrap with our fifth metric, it’s a related metric. Where are we going with the fifth metric here today?
Marcia Williams (10:05):
The fifth metric, as you said Scott, is related to the preview one, to the fill rate because in this case what we are going to track is the time. So that why we are seeing now the customer order fulfillment time that is we need to adapt because it’s the sum of different cycle times like to source to order transform because it can be manufacturing or also assembly. We can assemble a kit for example, for e-commerce companies and also return of course fulfill right and return. So we adapt all the different cycles and we get to the customer order fulfillment time that then we divided by the total number of orders delivered.
Scott Luton (11:05):
Yeah, really appreciate these practical explanations of these five key metrics on this one here on customer order fulfillment time. Amazon, I’ll tell you what has greatly changed customer expectations and supply chain performance expectations. If you had to pick one metric, this might be the one that really speaks to the Amazon effect. Would you agree Marcia?
Marcia Williams (11:28):
Yes, yes. Speed is Amazon through that speed that has built gaining a competitive advantage.
Scott Luton (11:39):
That’s right.
Marcia Williams (11:39):
So it’s a key metric as you are indicating Scott
Scott Luton (11:43):
And all the other five metrics here. I mean you’d be hard pressed to find really successful supply chain teams that aren’t tracking all five of these things, especially here in 2024. So really appreciate each of your explanations and I bet I’ll tell you Marcia, I admire a lot of things that you’re involved with. I see you putting out great content all the time. I love your infographics. That may sound simple, but man, a lot of folks are enjoying just that easy way to learn new things all about global supply chain, global business. So how can folks connect with you, Marcia Williams, so they can continue this conversation?
Marcia Williams (12:23):
Thank you so much for the comment. I really appreciate your support, Scott. They can connect through LinkedIn. I’m very active there. I post from Monday through Friday, so it’s a pleasure to connect and learn other perspectives and from the audience there,
Scott Luton (12:48):
It’s just that easy. I’ll tell you with each of those knowledge shares you have, the discussions I find sometimes in the comments are, I mean you’re getting like a master’s degree from the comments alone.
Marcia Williams (13:01):
I know they do such a great job and I love reading the comments because I have been learning so much with the post that it is unbelievable. I really enjoy that every day.
Scott Luton (13:17):
We can never stop learning every single day, every single hour. Good stuff here today. Thanks for your time. Marcia Williams really enjoyed this addition of whiteboard wisdom.
Marcia Williams (13:29):
Thank you so much for having me Scott. Thank you.
Scott Luton (13:34):
More to come. More to come. Alright. So folks, hope you enjoyed this conversation with Marcia here today. As much as I have, be sure to connect with her on LinkedIn. As she mentioned, you don’t want to miss all the other brilliance and knowledge. He drops every day of the week basically related to global supply chain, business leadership, and much, much more. But now the onus is on you to take one thing from today’s conversation, put it into practice, take one of those metrics and do a deep dive. Get with your team, see how you’re currently measuring in any of these areas. Take that action. It’s all about deeds, not words. And hopefully you join us for the next episode of Whiteboard Wisdom, where we focus on practical, actionable expertise to change how business is done for the better. So with all that said, on behalf of the entire supply chain now, team Scott Luton challenging you, do good, give forward, be the change that’s needed, and we’ll see you next time. Right back here on Whiteboard Wisdom, part of the supply chain. Now community.
