Supply Chain KPIs Are No Longer Keeping Up With The Job

Supply chain leaders are being asked to deliver far more than cost savings. They are expected to improve resilience, accelerate decisions, manage supplier risk, strengthen continuity, and support broader business strategy. Yet in many organizations, the performance metrics used to evaluate supply chain teams still reflect an older operating model built primarily around savings and transactional efficiency.

That gap matters. If the work has expanded but the scorecard has not, teams may be incentivized to optimize for short-term cost reductions while underweighting resilience, responsiveness, and risk readiness. Supplier diversification, recovery planning, sourcing cycle time, decision latency, and exposure visibility are increasingly central to supply chain performance, but they are not always captured in traditional KPI frameworks.

The Institute for Supply Management recently published a useful article on this issue, arguing that supply chain value now needs to be measured across a broader set of dimensions, including resilience, speed, risk reduction, and organizational readiness. The piece makes the case that savings remain important, but they are no longer sufficient as the primary indicator of supply chain contribution.

For supply chain executives, the larger takeaway is clear: measurement systems need to catch up with the strategic role supply chain now plays. Organizations that modernize their KPI frameworks will be better positioned to demonstrate value not only through cost control, but through continuity, agility, and better enterprise decision-making.

Read the full article from the Institute for Supply Management here: Supply Chain work has evolved faster than the KPI’s used to measure it.