How Should My Friend Answer Questions About KPIs in a Supply Chain Job Interview?

Hi to all my seniors, yesterday, a friend of mine had his job interview. He is an MBA in supply chain management. A question in his interview was about his KPIs (Key Performance Indicators), and he got confused. He didn't know what the answer to this question should be to impress the interviewer. Can one of my seniors or experts provide a good answer to this question?

Understanding KPIs in Job Interviews

KPIs depend on the job description, and thus, no one can provide a precise answer without knowing that.

Regards,
Simhan
Chief Advisor, Promentor-consulting

Understanding KPIs in Supply Chain Management

KPI is basic knowledge in any discipline of management, let alone SCM. I am a little surprised that after completing his MBA in SCM, he got confused with the question. Anyway, you can check my previous reply regarding KPIs for the purchase department: https://www.citehr.com/315735-kra-pu...ml#post1704402

Thanks,

Dinesh V Divekar

Beware of false knowledge; it is more dangerous than ignorance.

To my knowledge, I wonder whether your friend has understood the meaning of KPI and how it's related to his job profile. There is nothing to worry about when one has no information or knowledge about it. Your friend should have done a little homework before appearing for the interview.

I have no idea if any universities are covering KPI/KPA/KRA, PMS, BSC, etc., in their course modules.

Mr. Simhan correctly pointed out that KPI is associated with the job description. KPA/KRA is based on the job or project assigned, defining "targets/goals to be achieved" or "project to be completed within a specific time."

With profound regards,

KPI, i.e., Key Performance Area:
Functions to be performed by the employee. For example, KPI for a Sales Executive may include:
- Contacting potential customers.
- Conducting market surveys for new products.

Minimum KPIs for SCM/Purchase

The minimum Key Performance Indicators (KPIs) for Supply Chain Management (SCM) and Purchase are as follows:

- **Number of PR/PO Received:** Actions taken and pending Purchase Requisitions (PR).
- **Lead Time:** Time taken to produce the material and services.
- **Cost Reduction:** Reduction in the cost of procurement material and services without compromising quality.
- **Quality Complaints:** Complaints from users and actions taken (keep records), including service providers.
- **Vendor Complaints:** Complaints from vendors/service providers and actions taken from our side.
- **Interpersonal Relations:** Maintaining effective interpersonal relations.
- **5S:** Implementing the 5S methodology for workplace organization.

Regards,
Sanjay Nagore
GM-HR
Gurgaon
[Phone Number Removed For Privacy Reasons]

I would like to comment on why they have become confused. It is because they were not aware of the terminology; however, the question was good. If one has set their goal in Supply Chain Management (SCM), then they should have a clear objective to satisfy the interviewers. Why has he selected SCM as a career? Secondly, one must familiarize themselves with the terminology they are going to encounter. Of course, after working, one can assess but must be able to identify the prospects.

Regards,
Arun

The interviewer was asking about the person's KPIs and not the KPIs of the job, I think. Should he have mentioned that he is hardworking, optimistic, committed, etc.?

Of the list of KPIs that you have given for Procurement, (f) and (g) cannot be KPIs as these are not SMART. Secondly, KPI (c) has to be linked with sales revenue.

Thanks,

DVD

Minimum KPIs for SCM/Purchase

Minimum KPI's for SCM/Purchase are as follows:
- a) Number of PR/PO received, actions taken, and pending PR
- b) Lead time taken to produce the material and services
- c) Reduction in cost of procurement material and services (without compromising the quality)
- d) Quality complaints from users and actions taken (keep record) and services providers
- e) Complaints from vendors/Service Providers from our side and actions taken
- f) Inter-Personal Relations
- g) 5S

Regards,

Sanjay Nagore GM-HR Gurgaon [Phone Number Removed For Privacy Reasons]

Hi Savita,

The KPIs are as follows:

- Timely providing manpower
- Reduce recruitment cycle time
- Reduce recruitment administrative cost
- Timely providing manpower
- Meeting deadlines
- JD formulation for all positions
- Agreement availability with all consultants
- 100% use of job portals for closing the vacancies
- Reference check for all positions
- Offer letter/Appointment letter issued to the new joiners
- Proper induction & joining formalities

Regards,
Sanjay Nagore
GM-HR
Mobile No: [Phone Number Removed For Privacy Reasons]

Your friend working in the Supply Chain Management (SCM) department can measure his Key Performance Indicators (KPIs) by focusing on the non-stoppage of manufacturing, stock value based on ABC Analysis, and FSN analysis. The stock value can be quantified in terms of the number of days.

Regards,

The whole thing is about how a person would show or indicate their performance. The individual should first understand the question, analyze it, and correlate it to their talent, ability, knowledge, and experience to answer effectively.

Thanks and regards,
Bijay

Key Performance Indicators (KPIs) for Supply Chain Management

His KPIs are supposed to be as follows:

1. Inventory management through optimization of inventory.
2. Developing suppliers to improve their delivery performance.
3. Zero part shortages or production loss.
4. Zero dead stock.
5. Zero mismatch between actual and ERP stock; unexplained mismatches.
6. To quantify and achieve a high level of inventory turnover ratio.

Although the scope of SCM is very vague, the major focus is on inventory control. Inventory management is a never-ending job.

Regards,
Sanjeev
Toyota Kirloskar

Understanding Key Performance Indicators (KPIs)

KPI's full form is Key Performance Indicators. You have a team of 10 people headed by a GM - Marketing, which handles 3 products. Now, the target for the GM is selling 900 units of these 3 products. There are 3 persons per product, and each person has to sell 100 units of the product allocated to them. This is their primary KPI.

Other than that, there may be other performance indicators, such as the average number of days they are getting the payments and what the target can be. Additionally, in how many days they are obtaining the necessary forms or issuing the necessary statutory forms and what the target can be. The GM's KPI will also include the percentage of realization (selling price - cost price) and what the target is.

The essence is to plan for performance and try to achieve or surpass it. As what is expected of you is communicated at the beginning of the year, it is not very difficult to plan your goals. Similarly, in SCM (comprising Procurement, Vendor Development, Logistics, Inventory Management), your friend has to identify the indicators of performance that justify his existence in the company.

Thanks & regards,

S. Ganapathy

Understanding KPIs and KRAs

KPIs - Key Performance Indicators & KRAs - Key Result Areas are one and the same. Normally, this varies from organization to organization; every company will have its preset Mission and Vision in the business arena.

In my experience, it is usually the staff at the operational end (i.e., trainee, Jr. Exe., Exe., Sr. Exe.) who will be given their day-to-day role and responsibilities as per their designation and area of operation.

But as the responsibility of the individual increases due to appraisal & promotions, there will be changes in the level of designation (i.e., Team Lead, Project Lead, Asst. Mgrs, Managers). It is at this stage that the staff will be given their KPIs or KRAs to perform and will vary from designation to designation.

When the reporting structure changes and they report to a higher authority such as Head, VP, Director, CEO, they have to ensure that their KRIs & KRAs match their performance and comply with business standards.

It will then be seen in the Monthly Dashboard meetings & senior managers meetings that their performance will be calculated based on their KPIs and KRAs - thus ensuring profitability & growth of the business.

I do not want to further expand on this as it will consume many hours of explanation.

Thank you,

Regards,
Ashley

Sr. Organizational Development Manager