Certified Supply Chain Professional (CSCP) Practice Exam

Which metric is considered a key performance indicator?

1. The total number of employees

2. Customer satisfaction scores

3. The size of the facility

4. Annual revenue growth

The correct answer is: Customer satisfaction scores

Customer satisfaction scores are considered a key performance indicator (KPI) because they directly reflect how well a company is meeting the needs and expectations of its customers. In supply chain management, understanding customer satisfaction is crucial for assessing the effectiveness of supply chain practices. High customer satisfaction can lead to repeat business, customer loyalty, and positive word-of-mouth, which are essential for a company's long-term success. This metric provides insights into various aspects of the business, such as product quality, delivery performance, and customer service, allowing organizations to make informed decisions to improve their offerings and processes. On the other hand, while the total number of employees, the size of the facility, and annual revenue growth can provide useful information about a company's operations and financial health, they do not directly measure customer perceptions or experiences. These metrics might indicate scalability or operational efficiency but lack the direct link to customer satisfaction that is critical for evaluating a company's performance in meeting its market obligations.