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Finance and Supply Chain Dashboards
Serving intelligence to the C-suite

by Shadan Malik, www.idashboards.comMonday, August 27, 2007

The popularity of dashboards has led to an increased adoption of the technology through the organization. In response to this, individual departments are requiring dashboards that serve their unique operational needs and performance monitoring. For example, the information needs of the Finance department are very different from those of Supply Chain. Therefore, deployment of divisional dashboards requires focus and subject matter expertise from the specific department the dashboards would serve.

A finance dashboard contains all relevant metrics for the Chief Financial Officer (CFO), and other executives within the finance and accounting areas within the organization. Typical finance metrics could include current sales by various geographic regions and business units, cost of sales, accounts receivable and payable, cash flow, profit and loss (P&L), asset utilization, budget versus actual, as well as regulatory compliance metrics.

Depending on the level and area of an individual's responsibility, the metrics would be presented for that area at appropriate aggregate levels with security to block non-privileged metrics. The following are some of the financial areas that may be included within a finance dashboard:

  • Financial statements. Income sheet, balance sheet, and cash flow
  • Cost control. Departmental cost, budget versus expenses
  • Activity-based costing. Cost centers and cost activities
  • Accounts receivable. Collections, risks, and discount analysis
  • Accounts payable. Cash and discount optimization, supplier data sheet
  • Expense cycle. Aging, cash out flow, and purchase requisition
  • Revenue cycle. Revenue ladder, funnel, and product backlog

We will focus on identifying the Key Performance Indicators (KPIs) and discussing further in detail the following finance specific dashboards:

AR and AP

The Finance Director within the organization is responsible for monitoring financial performance across all the business units and is responsible for several associates, within both the AR and AP departments. Therefore, this director requires the weekly trend of total receivables past the due date, with numbers further broken out by the number of days past due. In addition to AR, he is also responsible for monitoring AP and ensuring that accounts are current and acting upon ones that are not. He also needs to monitor these metrics by each of the associates who report directly to him. Some further performance metrics of these associates are required, such as the weekly recovery by each of them, average maturity age of delinquent accounts assigned to each of them compared to the overall average, and so forth.

The design of an effective dashboard in this scenario would require application of appropriate chart types such as trend line, bar/column charts, and summarized reports. For example, accounts receivables can be broken out by total dollars outstanding within different time ranges and represented as a bar chart. Tabular charts would indicate the account receivables numbers broken out by each customer. There are different charts which are able to display any other pertinent financial information within a dashboard. In addition, drill downs can be configured within the dashboard to get more details on each of those customer accounts.

iDashboards Digital Dashboard

AR and AP Dashboard this dashboard shows the financial metrics pertaining to AR and AP. (Courtesy of iDashboards)

Note that the key difference between a dashboard, as described, and an accounts receivable software program that may provide some of this information is thepower of visualization and consolidation of all relevant metrics required for better management. An effective dashboard would ensure that a problem requiring immediate attention is not overlooked or buried under disparate reports and numbers. The enhanced information visualization capacity improves enterprise performance management at every level of the dashboard deployment.

Supply Chain

A supply chain dashboard contains all relevant metrics for the Supply Chain department responsible for distribution, inventory, and logistics management. Typical supply chain metrics might include inventory turn, days of supply, fill rate, distribution time, in-transit inventory, rate of damaged goods, on-time delivery, gross margin, and supply chain scorecards.

Depending on the level and area of an individual's responsibility, the metrics would be presented for that area at appropriate aggregate levels with security to block non-privileged metrics. The following are some of the supply chain areas and corresponding metrics that may be included within a dashboard:

  • Inventory. Days of supply, inventory turns, average time to ship, % open orders
  • Cost. Return on capital, overheads, margin
  • Transshipment. Volume in-transit, interwarehouse shipment, loading-unloading time, % damages

There can be multiple Key Performance Indicators (KPIs) for different areas of the supply chain, we will discuss in further detail the following supply chain specific dashboards:

Order Fulfillment

A Manufacturing Manager for the North Region requires a supply chain dashboard. This manager requires the weekly sales numbers for each item with variance to indicate anticipated adjustment in the inventory. The requirements include monthly tracking of inventory turns, orders shipped, and orders that are backlogged. Also, there is a need to identify customers with the ability to further drill-down and view additional customer account information.

iDashboards Digital Order Fulfillment Dashboard

Order Fulfillment Dashboard this dashboard shows the metrics pertaining to order fulfillment. (Courtesy of iDashboards)

The design of an effective dashboard in this scenario would require application of appropriate chart types such as pie, trend line, bar/column charts, and summary tables. For example, top shipping customers may be displayed in a table format. Negative variances may be highlighted in red to get a viewer's immediate attention. Fiscal orders shipped may be displayed as a trend line.

Another useful function for a supply chain dashboard would be to monitor a scorecard in terms of percent flexibility and reliability of the distribution channel. How many delivered orders are damaged or wrongly delivered as a percentage of the total purchase orders? These metrics would indicate the efficacy of the supply chain and the performance of the people responsible.

By identifying the key performance indicators (KPIs), dashboards provide pertinent information to the individuals regarding their operations. A Dashboard is a simple tool for different departments within the organization to gain a real-time view into their data.

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