Which metric is crucial in evaluating supply chain performance?

Order Fulfillment Rate is a critical metric in evaluating supply chain performance because it measures the efficiency and effectiveness of the supply chain in delivering products to customers. This metric reflects how well a company can meet customer demand by fulfilling orders on time and in the correct quantities. A high order fulfillment rate indicates that the supply chain is functioning smoothly, leading to increased customer satisfaction and loyalty, which are vital for business success.

Inventory Turnover Rate, while important for understanding how quickly inventory is sold and replaced, does not directly measure the effectiveness of fulfilling customer orders. Return on Investment focuses on the financial performance of investments rather than the operational aspects of supply chain performance. Employee Satisfaction Index, though significant for overall company health, is not a direct measure of supply chain effectiveness. In essence, the Order Fulfillment Rate specifically aligns with the core goal of the supply chain—to effectively serve customers.