They help in managing food safety risks, improving product quality, and ensuring consumer trust. KPIs in this context support continuous improvement in food safety management. They are crucial for food-related businesses to maintain high standards of food safety and quality.
KPI |
Definition
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Business Insights [?]
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Measurement Approach
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Standard Formula
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Cash-to-Cash Cycle Time More Details |
The time between the outlay of cash for raw materials and receiving cash from customers for product sales, impacting liquidity and cash flow.
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Helps assess the efficiency of a company's cash flow management and its ability to convert resources into cash.
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Duration from when a company pays its suppliers to when it receives payment from customers.
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(Days Inventory Outstanding + Days Sales Outstanding) - Days Payable Outstanding
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- A decreasing cash-to-cash cycle time may indicate improved efficiency in inventory management or faster collection of receivables.
- An increasing cycle time could signal issues with inventory turnover, slower customer payments, or supply chain disruptions.
- What are the primary factors contributing to the length of our cash-to-cash cycle time?
- How does our cycle time compare with industry benchmarks or best practices?
- Implement lean inventory practices to reduce the amount of cash tied up in inventory.
- Offer discounts for early payment to encourage faster receivables collection.
- Strengthen relationships with suppliers to negotiate favorable payment terms and reduce the cash outlay for raw materials.
Visualization Suggestions [?]
- Line charts showing the trend of cash-to-cash cycle time over time periods.
- Stacked bar charts comparing the components of the cycle time (e.g., inventory holding period, accounts receivable collection period, accounts payable payment period).
- Extended cash-to-cash cycle time can strain liquidity and working capital, leading to potential cash flow issues.
- Long cycle times may indicate inefficiencies in the supply chain or operational processes that could impact overall business performance.
- Enterprise resource planning (ERP) systems with integrated financial and supply chain modules for comprehensive tracking and analysis.
- Cash flow management software to monitor and forecast cash inflows and outflows.
- Integrate cash-to-cash cycle time analysis with financial planning and budgeting processes to align working capital management with overall business goals.
- Link cycle time tracking with procurement and inventory management systems to optimize cash flow and inventory levels.
- Reducing the cash-to-cash cycle time can free up working capital for investment in growth opportunities or to weather economic downturns.
- However, aggressive reduction efforts may impact supplier relationships and quality if not managed carefully.
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Critical Incident Response Time More Details |
The time taken to respond to and address critical incidents in the supply chain, affecting continuity and resilience.
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Provides insights into the efficiency and effectiveness of the organization's incident management processes.
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Elapsed time from identification to resolution of a critical incident.
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Time of Incident Resolution - Time of Incident Identification
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- An increasing critical incident response time may indicate inefficiencies in supply chain processes or lack of preparedness for disruptions.
- A decreasing response time can signal improved resilience and proactive measures to address critical incidents.
- Are there specific types of critical incidents that consistently take longer to address?
- How does our critical incident response time compare with industry benchmarks or best practices?
- Implement real-time monitoring and alert systems to quickly identify critical incidents.
- Regularly review and update contingency plans to ensure swift and effective response to disruptions.
- Invest in training and resources to enhance the skills and preparedness of supply chain personnel.
Visualization Suggestions [?]
- Line charts showing the trend of critical incident response time over time.
- Stacked bar charts comparing response times for different types of critical incidents.
- Extended critical incident response times can lead to significant disruptions in operations and financial losses.
- Frequent delays in addressing critical incidents may indicate a lack of resilience and preparedness in the supply chain.
- Supply chain visibility and control platforms to monitor critical incidents and response times.
- Incident management software to streamline the reporting and resolution of critical incidents.
- Integrate critical incident response time tracking with risk management systems to identify potential vulnerabilities and prioritize preparedness efforts.
- Link with logistics and transportation management systems to assess the impact of critical incidents on delivery schedules and customer satisfaction.
- Improving critical incident response time can enhance overall supply chain resilience and reduce the potential for operational disruptions.
- However, investing in faster response times may require resource allocation and training, impacting short-term costs.
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Customer Order Cycle Time More Details |
The total time taken from receiving a customer order to delivering the product or service, reflecting the speed of the supply chain.
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Assesses the efficiency of the order to delivery process, highlighting potential areas for improvement in customer satisfaction.
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Time between a customer placing an order and receiving it.
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Time of Order Delivery - Time of Order Placement
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- Increasing customer order cycle time may indicate bottlenecks in the supply chain or production delays.
- A decreasing cycle time can signal improved efficiency in order processing, production, or delivery.
- What are the specific stages in the order fulfillment process where delays are most common?
- How does our customer order cycle time compare with industry benchmarks or customer expectations?
- Implement lean manufacturing principles to streamline production processes and reduce lead times.
- Invest in technology for real-time tracking of orders and inventory to identify and address delays promptly.
- Collaborate closely with suppliers to improve lead times for raw materials or components.
Visualization Suggestions [?]
- Gantt charts to visualize the timeline of each customer order from receipt to delivery.
- Line graphs showing the average cycle time over specific time periods to identify trends.
- Extended cycle times can lead to customer dissatisfaction and potential loss of business.
- Consistently long cycle times may indicate inefficiencies that could impact overall supply chain performance.
- Enterprise resource planning (ERP) systems with order management and production scheduling modules.
- Transportation management software for optimizing delivery routes and reducing transit times.
- Integrate customer order cycle time data with production planning systems to align manufacturing capacity with demand.
- Link cycle time tracking with customer relationship management (CRM) systems to monitor the impact on customer satisfaction and retention.
- Reducing cycle time can improve customer satisfaction and retention, leading to increased sales and revenue.
- However, overly aggressive reduction efforts may strain resources and potentially impact product quality or service levels.
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CORE BENEFITS
- 38 KPIs under ISO 22004
- 15,468 total KPIs (and growing)
- 328 total KPI groups
- 75 industry-specific KPI groups
- 12 attributes per KPI
- Full access (no viewing limits or restrictions)
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Demand Forecast Accuracy More Details |
The accuracy of prediction for future demand compared to actual demand, impacting inventory levels and customer satisfaction.
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Enables businesses to evaluate the precision of their demand planning and make adjustments to reduce inventory costs and improve customer service.
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Comparison of actual demand to forecasted demand.
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(1 - (Absolute Value of (Actual Demand - Forecasted Demand) / Actual Demand)) * 100
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- Increasing demand forecast accuracy may indicate improved supply chain management or better understanding of customer needs.
- Decreasing accuracy could signal issues with data quality, changing market conditions, or ineffective forecasting methods.
- Are there specific products or regions where demand forecasting tends to be less accurate?
- How do our actual sales compare to the forecasted demand, and what factors contribute to any discrepancies?
- Invest in advanced analytics and machine learning tools to improve demand forecasting accuracy.
- Regularly review and update forecasting models based on market trends, customer feedback, and historical data.
- Collaborate closely with sales and marketing teams to gather insights and align forecasts with promotional activities or new product launches.
Visualization Suggestions [?]
- Line charts showing the trend of forecasted demand versus actual sales over time.
- Pareto charts to identify the most significant contributors to forecast inaccuracies.
- Poor demand forecast accuracy can lead to excess inventory or stockouts, impacting financial performance.
- Inaccurate forecasts may result in missed sales opportunities and reduced customer satisfaction.
- Advanced forecasting software such as SAS Forecast Server or Oracle Demantra for more accurate predictions.
- Collaborative planning, forecasting, and replenishment (CPFR) tools to facilitate communication and data sharing with suppliers and partners.
- Integrate demand forecasting with inventory management systems to optimize stock levels based on accurate predictions.
- Link forecasting with production planning to align manufacturing capacity with expected demand.
- Improving demand forecast accuracy can lead to better resource allocation and reduced operational costs.
- However, overestimating demand can result in excess inventory and increased carrying costs, while underestimating can lead to stockouts and lost sales.
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Freight Bill Accuracy More Details |
The accuracy of freight costs and billing, reducing discrepancies and overcharges in transportation expenses.
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Highlights the accuracy in shipping documentation, impacting cost containment and customer satisfaction.
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Rate of error-free freight bills.
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(Number of Error-Free Freight Bills / Total Freight Bills Processed) * 100
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- An increasing freight bill accuracy may indicate improved processes in tracking and verifying transportation costs.
- A decreasing accuracy could signal issues in invoice reconciliation or vendor management.
- Are there specific carriers or routes where discrepancies in freight costs frequently occur?
- How does our freight bill accuracy compare with industry benchmarks or historical performance?
- Implement automated freight audit and payment systems to catch billing errors and discrepancies.
- Establish clear communication channels with carriers and vendors to resolve billing issues promptly.
- Regularly review and update freight contracts to ensure accurate billing and cost control.
Visualization Suggestions [?]
- Line charts showing the trend of freight bill accuracy over time.
- Pie charts to visualize the distribution of billing discrepancies by carrier or transportation mode.
- Inaccurate freight bills can lead to financial losses and strained relationships with carriers and vendors.
- Consistent discrepancies may indicate systemic issues in the transportation procurement and payment processes.
- Transportation management systems (TMS) with built-in freight audit and payment capabilities.
- Data analytics tools to identify patterns and anomalies in freight billing data.
- Integrate freight bill accuracy tracking with accounting systems for seamless reconciliation and payment processes.
- Link with procurement and vendor management systems to address billing discrepancies at the source.
- Improving freight bill accuracy can lead to better cost control and more accurate financial reporting.
- However, stringent verification processes may lead to longer payment cycles and potential strains on vendor relationships.
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Inventory Carrying Cost Percentage More Details |
The percentage of total inventory value that represents the cost of holding inventory, including storage, insurance, and obsolescence.
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Shows the proportion of inventory costs, aiding in the decision-making on inventory levels and investment.
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Total carrying costs as a percentage of total inventory value.
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(Total Inventory Carrying Costs / Total Inventory Value) * 100
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- Increasing inventory carrying cost percentage may indicate inefficient inventory management or excessive stock levels.
- A decreasing percentage could signal improved inventory turnover and cost control measures.
- What factors contribute to the high inventory carrying cost percentage?
- Are there specific products or categories driving up the inventory carrying cost?
- Implement lean inventory practices to reduce excess stock and carrying costs.
- Regularly review and optimize inventory levels to minimize storage and obsolescence costs.
- Explore alternative storage solutions or partnerships to reduce storage expenses.
Visualization Suggestions [?]
- Line charts showing the trend of inventory carrying cost percentage over time.
- Pie charts to visualize the distribution of inventory carrying costs across different cost components (e.g., storage, insurance, obsolescence).
- High inventory carrying cost percentage can lead to reduced profitability and competitiveness.
- Excessive obsolescence costs may indicate poor inventory management and product forecasting.
- Enterprise resource planning (ERP) systems with inventory management modules for tracking and analyzing inventory costs.
- Cost accounting software to accurately allocate and monitor inventory carrying costs.
- Integrate inventory carrying cost data with financial systems to understand the impact on overall profitability and financial performance.
- Link with procurement and supply chain systems to optimize inventory levels and reduce carrying costs.
- Reducing inventory carrying cost percentage can lead to improved cash flow and overall financial performance.
- However, cutting costs too aggressively may impact product availability and customer satisfaction.
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In selecting the most appropriate ISO 22004 KPIs from our KPI Library for your organizational situation, keep in mind the following guiding principles:
It is also important to remember that the only constant is change—strategies evolve, markets experience disruptions, and organizational environments also change over time. Thus, in an ever-evolving business landscape, what was relevant yesterday may not be today, and this principle applies directly to KPIs. We should follow these guiding principles to ensure our KPIs are maintained properly:
By systematically reviewing and adjusting our ISO 22004 KPIs, we can ensure that your organization's decision-making is always supported by the most relevant and actionable data, keeping the organization agile and aligned with its evolving strategic objectives.