Performance Measurement in SCM
Transcript of Performance Measurement in SCM
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PerformancePerformanceMeasurement in SCMMeasurement in SCM
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WhyWhy MMeasure Performanceeasure Performance
y Support better Decision Making:
Better decisions by making performance &
results visible
Difficult to assess areas which need
improvement
y Support Better Communication:
Across supply chain including betweendepartments ,with suppliers and with executive
management
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ContdContd
y Provide Performance Feedback:
Supports the prevention or correction of
problems identified during measurement
process
y Motivate & Direct Behaviour:
Directs behaviour towards desired end
results
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Dimensions of PerformanceDimensions of Performance
MeasurementMeasurementy There are three dimensions of
performance measurement:
Internal Performance Measurement
External Performance Measurement
Comprehensive Supply Chain
Performance Measurement
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Internal PerformanceMeasurement- refers to a comparisonof the present level of logistical functions
and/or goals with the previous operationsand/or goals.
Five broad categories are: Cost
Customer Service Asset Management Quality Productivity
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y External Performance
Measurement- refers to visualizing it
from the customer and competition point
of views.
y It involves two major aspects:
Customer Perception Measurement
Competitive Performance Measurement
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y Comprehensive Supply Chain
Management- it gives an integrated
perspective on supply chain performance
measurement.y A framework was developed which
incorporates four types of Matrics, namely :
Customer satisfaction/quality
Time
Cost
Assets
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Integrated Supply Chain Matrics Framework
Outcomes Diagnostics
Customer satisfaction/quality
Perfect order fulfilment Delivery -to -commit date
Customer satisfaction Warranty costs, returns &
allowances
Time
Source/make cycle timeOrder fulfilment lead time Supply chain response time
Production plan
achievement
Costs
Total supply chain costs Value-added productivity
Assets
Cash-to-cash cycle time Forecast accuracy
Inventory days of supply Inventory obsolescence
Asset performance Capacity utilization
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BenchmarkingBenchmarking
y It is a process of industrial research that
enables to perform company-to-company
comparisons of processes & practices to
identify the best of the best and attain alevel of superiority or competitive
advantage.
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Phases in BenchmarkingPhases in Benchmarking
y Planning
Identify benchmark subject
Identify benchmark partner
Data sources & data collection
y Analysis
Determine competitive gapProject future performance
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ContdContd
y Integration
Communicate results
Establish functional goals
y Action
Develop action plans
Implement & monitor resultsRecalibrate benchmarks
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Impediments to ImprovedImpediments to Improved
PerformancePerformancey Failure toAdopt Customer Expectation
y Lack of Requisite Cost Data
y Lack of Comprehensive Management
Skills
y Failure to Think as a System
y Lack of Infrastructural Facilities
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ConclusionConclusion
SCM is the only function that takes care of
both Costs as well as Service. Thats why
measuring ones performance is so
necessary. It assists the firm to enjoy theoverwhelming contribution of SCM as a
differentiator.
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THANKYOU.THANKYOU.
y Presented by:-
Neeraj Maheshwari (24)
Rohit Kumar (36)
Shweta Telkhade (46)