Performance measurement is a key factor to every business in the world. Supply chain management is not to be left behind. In fact, there are several metrics that a supply chain manager should adopt such as just-in-time, six-sigma, total quality management and the latest lean (Mangan, Lalwani and Butcher, 2008). The following are the factors that would make the supply chain manager to use performance metrics;

First, the manager will use the metrics to reduce wastage in the company. The wastage can be in the form of time, inventory and defects. If the members work together to eliminate wastage on the elements that are not adding value to the company as well as those which are wasteful, they will eventually reduce cost and improve on efficiency (Lu, 2011) .

Secondly, they are influenced by demand management. This is the most important factor in supply chain and most companies compete on this. Lu (2011) argues that there is always room for improvement in demand management. He adds that a company’s resource management systems only can enhance or constrain demand management.

The third factor is process standardization, which enables continuous flow of products through the system to the customer. Major blocks to this flow are batch processing and transport. If this factor is not chased after, it will increase the operations cost.

Engaging people is another factor. This must be the starting point since the whole process of supply chain involves all the people who are employed there. “Engaging people is the only way to change the organizational structure”, (Lu 2011).

Collaboration is another factor. This involves working together of companies within the same supply chains or across different supply chains. It promotes technological advancement and innovation within the supply chain.

Relationship between supply chain performance metrics and;

1. a)   Foreign vendors

Foreign vendors use performance metrics to compare their capacity and those of the competitors. They also use them in identifying the areas where they need to collaborate with the others so as to enhance service delivery.

1. b)   Customer experience

Since satisfaction is the best business philosophy, the companies are supposed to understand their performance using metrics as in customer polls, customer service metrics and quality programs.

1. c)   Competition

Supply chain companies should not only compete locally but globally. Mangan, Lalwani and Butcher (2008) found out that DHL’s mergers and acquisitions have made it to become one of the largest employers globally.

1. d)   Employee motivation

Performance metrics is also used in motivating employees by companies especially by communicating those metrics with employees. This helped in increasing the number of orders executed as stated by Mangan et al, (2008).