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Supply chains can be viewed in terms of flows, functions, communities, or systems. But no matter how you look at it, effective supply chain management requires being able to measure what’s happening. Virtually every process in a supply chain can be measured with quantitative or qualitative metrics.

Quantitative metrics are objective, numerical indicators. Qualitative metrics describe intangible characteristics. Quantitative metrics might include things like current inventory levels or the amount of money spent on transportation. Qualitative metrics could describe the level of employee engagement or customer satisfaction. Table 2-1 lists some common types of qualitative and quantitative metrics.

TABLE 2-1 Quantitative versus Qualitative Metrics

Quantitative	Qualitative
Times	Degree of satisfaction
Rates	Likelihood of doing something
Values	Perceptions
Amounts	Desire or need
Frequencies	Level of agreement

Collecting measurements costs money and takes time, so it’s important to decide which metrics you really need. The key is to identify the steps in each supply chain process that will be most useful for understanding how things are working and what decisions you need to make. The metrics that give you this insight are called key performance indicators (KPIs). The KPIs in one business or facility can be very different from the KPIs in another, depending on which processes are most important to each organization. (For more information about metrics, see Chapter 16.)

A good way to look for improvement opportunities in any process is to compare your own performance with that of someone else. You can compare the KPIs from one facility with the KPIs at another or from one company to another, for example. Comparing KPIs in this manner is an example of benchmarking. Companies can benchmark their supply chain KPIs by using the Supply Chain Operations Reference (SCOR) Model, which is covered in Chapter 5. Benchmarking has become so popular that many companies have built their entire businesses on collecting, evaluating, and reporting on supply chain KPIs.

Companies (even competitors!) share benchmarking data all the time. But sharing business information can lead to problems if it violates laws such as the Clayton Antitrust Act. Before you start benchmarking with other companies, it’s a good idea to talk to a corporate attorney.

There are lots of ways to look at a supply chain. To manage a supply chain well, you need to understand each of these perspectives and use them to select the KPIs that give you visibility into how your supply chain is performing. Benchmarking those KPIs against other facilities and other companies can reveal areas in which you’re doing well and opportunities for improvement.