Aligning Planners and Sales/Marketing with a Unified KPI
By Intelichain’s Team
A common challenge in organizations is the tension between planners and sales/marketing teams. Planners often prioritize inventory KPIs like inventory adherence (IA), which measures how closely actual inventory matches planned levels. In contrast, sales and marketing teams focus on service levels like on-time delivery (OTD), which measures the percentage of orders delivered on or before the agreed date. This can lead to conflicting priorities: planners aim to reduce excess inventory, while sales teams strive to meet customer demand promptly.
To address this conflict, we propose a combined KPI called OTDIA. Calculated by multiplying on-time delivery (OTD) with inventory adherence (IA), OTDIA aligns both teams towards a shared objective of balancing inventory levels with customer satisfaction
IA (%) =
$$ IA \, (\%) = 1 - \frac{| \text{Actual Inventory} - \text{Planned Inventory} |}{\max (\text{Actual Inventory Level}, \text{Planned Inventory Level})} \times 100 $$Example: If the actual inventory is 90 units and the planned inventory is 100 units:
$$ IA = 1 - \frac{| 90 - 100 |}{\max (90, 100)} = 1 - \frac{10}{100} = 0.9 \times 100 = 90\% $$OTD (%) =
$$ OTD \, (\%) = \frac{\text{Orders Delivered On-Time}}{\text{Total Customer Orders}} \times 100 $$Example: OTD = (95 / 100) × 100 = 95%
OTDIA = $$ OTDIA = \text{Inventory Adherence} \, (\%) \times \text{OTD} \, (\%) $$
Example: OTDIA = 90% × 95% = 85.5%
By introducing this combined KPI, both planners and sales/marketing teams will have a shared goal that balances inventory efficiency with customer satisfaction. This collaboration can help streamline operations, reduce conflicts, and drive overall business performance. Let’s align our KPIs for a more efficient and effective organization!
