Your New Supply Chain Metric?

Picture source: http://einsedu.in/
INDUSTRIAL ENGINEER – VOLUME 47, NUMBER 2

Net promoter score helped data and voice company improve dramatically
Some supply chain management practitioners are touting a metric that goes beyond complete or on-time shipped as well as back orders as a percent of sales, Forbes magazine reported.

The net promoter score (NPS) is based on the premise that your customers can be divided into promoters, passives and detractors. The underlying data comes from one question, How likely is it that you would recommend our company to a friend or colleague?

Customers respond on a scale of zero through 10, and tracking these groups can give you a clear measure of how your company performs through their eyes, according to the magazine.

Customers who score nine or 10 are promoters, enthusiasts who will continue to buy and are most likely to refer others, which can fuel your company’s growth. Passives score a seven or eight. Though they might be satisfied, they could succumb to offerings from the competition.

Those who score from zero to six are dissatisfied, and they can hamper growth through negative word-of-mouth.

Your company’s NPS comes from taking the percentage of customers who are promoters and subtracting the percentage who are detractors, according to the magazine, which gave an example of the metric via Avaya, which provides data and voice solutions.

Avaya, which promotes the use of NPS, implemented a program that increased on-time shipments from 86 percent to 94 percent and cut past due dollar shipments from $42 million to $9 million. The company used NPS to make sure it was moving in the right direction, and its net promoter score went from 27 to 44.