Visual performance Management Oct 20 OIPMAC

Supply Chain Risk and Performance Monitoring:

The use of automated systems to help you manage key areas of your

organization

2012 Annual Conference Presentation

Which sector are you in?Pick one!

1 2 3 4 5 6 7

20 0

3

31

11

1. Municipal2. Academic

(University/College)3. School Board4. Health Care5. Broader Public Sector6. Private7. Federal/Provincial

Survey says

Municipal

Academ

ic (Unive

rsity/

College

)

School B

oards

Health

Care

Broad

er Public

Secto

r

Private

Company

Federa

l/Pro

vincia

l Gov't

Other0%

10%

20%

30%

12%

10%

7%

11%

16%

22%

14%

8%

How many Canadian employees work for your organization? Pick only one!

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0

2

8

12

7

3

4

3

1. 1 to 92. 10 to 243. 25 to 994. 100 to 2495. 250 to 4996. 500 to 9997. 1000 to 24998. 2500 +

Other than OIPMAC which Organization(s) do you belong to?

Pick as many as you would like!

1 2 3 4 5 6 7 8 9 10

4

0 0 0

24

8

5

1

00

1. OPBA2. CPPC3. NIGP4. OECM5. CMC6. HSCN7. Construction Association8. ISM9. Other10. None

Survey Says!

OPBA = Ontario Public Buyers AssociationCPPC = Canadian Public Procurement CouncilNIGP = National Institute of Governmental PurchasingOECM = Ontario Educational Collaborative MarketplaceCMC = Canadian Association of Management ConsultantsHSCN= Healthcare Supply Chain Network

How many competitive bids did your group issue in 2011?

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20

1

9

00

1. 1 to 492. 50 to 993. 100 to 1494. 150 to 1995. Greater than 200

How many competitive bids did the Town of Oakville issue in 2011?

180

On average how many vendor performance evaluations do you do per year?

Pick only one!

1 2 3 4 5

3

22

6

23

1. None2. 1 to 103. 11 to 254. 26 to 495. 50+

Survey Says!

Which tools or methods do you use?Pick as many as you would like!

1 2 3 4 5 6 7

17

11

20

7

23

17

6

1. Checklists2. Forms3. Templates4. User Guides & Manuals5. Progress meetings6. Performance

documentation7. 3rd Party verification

Which tools or methods do you use?

What triggers an evaluation?

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15

5

18

3

2

3

6

13

6

191. Periodic2. Budget Threshold3. Contract performance4. Project profile5. New vendor6. Project complexity7. Client Dissatisfaction8. Repeat vendors9. Length of Engagement10. Every Project

Survey Says!

Why Measure Performance?

• Support better decision making• Support better communication• Provide performance feedback• Motivate and direct behavior

15Leopold Koff, B.A., B.Ed., CPSM, CPM, CSCMPProfessor, Supply Chain & Operations ManagementSchool of Business & Hospitality

Problems with Purchasing and Supply Chain Measurement and Evaluation

• Too much data• Wrong data• Measurements that are short-term focused• Lack of detail• Drive the wrong performance• Measures behavior vs. accomplishments


Performance Measurement

• Effectiveness– Extent to which, by choosing a certain course of

action, management can meet a previously established goal or standard

• Efficiency– Relationship between planned and actual

sacrifices made to realize a previously agreed-upon goal


Metrics Key• SPECIFIC• MEASURABLE• ATTAINABLE• RESULTS ORIENTED• TIME-BASED


Develop Specific Measures

• Objectivity• Clarity• Use of accurate and

available data• Creativity

• Directly related to organizational objectives

• Joint participation• Dynamic over time• Non-manipulative


Measurement System Characteristics• Effective measurement requires consistent and reliable

data• Periodic review of measurement system to …

– Eliminate unimportant or unnecessary measurements– Add new criteria as required– Reevaluate objectives or targets– Objective versus Subjective criteria


Measurement System Characteristics

• Measurement is not free• Not all aspects of performance lend themselves to

quantitative measurement• Purchasing and supply management is better served

by a few precisely defined and thoroughly understood measurements


Measurement and Reporting Frequency

• Reporting frequency to buyer– Day-to-day performance for troubleshooting and

expediting• Reporting frequency to supplier

– Routinely summarized monthly or quarterly– Annual face-to-face meeting

• Never delay reporting supplier’s poor performance


Uses of Measurement Data

• Identify poor performing suppliers• Support supply base optimization and rationalization

efforts• Determine future purchase volume allocations• Identify performance improvement opportunities• Make sourcing decisions


Supplier Performance Management

• How does buyer know how well any given supplier is performing?

• Consists of methods and systems to collect and provide information to measure, rate, or rank ongoing supplier performance

• Acts as supplier “report card”


Working with ContractorsWHAT IS THE PURPOSE OF A CONTRACTOR PERFORMANCE

EVALUATION?• To ensure that contracts stay on track• To deal with issues and problems as they arise• To develop a relationship with contractors and an

understanding of what is expected• To document poor performance to alleviate the never

ending cycle

Kim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning

Steps to Good Performance Management

• Establish and implement procedures for review of performance problems and/or disputes

• Have a consistent ranking system and procedure – follow it!

• Conduct regular inspections-project managers• Have written report, minutes, notifications


Documenting Performance• The MOST crucial part of performance management• Weekly site meetings – up date the contractor on

upcoming issues or problems that have occurred. Get feedback from the contractor on how he feels the contract is going – take his suggestions to heart.

• Distribute site meeting minutes as soon after the meeting as possible

• Ask the contractor to note any exception to the minutes in an email or memo.


Documenting Performance

• Any performance issues MUST be discussed with the contractor

• Contractor give reasonable time to correct the issue• DOCUMENT all issues – copy contractor on all

documentation• Suggestion: Two part report form – initialed by

contractor• Never put yourself in a position where the contractor

can say, “I had no idea!”


Types of Documentation• Contract Check List

– Details deliverables and project milestones• Observation Record

– Document observations of Contractor Performance• Complaint Record

– To document and follow up on complaints• Discrepancy Record

– To note contract discrepancy, copy to contractor with expected actions.

• Field Diary– Used to keep track of daily records – be careful what you write.


Types of Documentation

• Summary Evaluation Report– This is the contractors formal evaluation. – Conducted annually and/or upon completion– Reports can be done more frequently for

probationary or problem contractors– All notes and documentations are attached– Meet with contractor to discuss final outcome


Contract Management

• Be flexible• Exercise sound judgement

Contracts are not held together by forms, surveys, diaries or other monitoring tools – but by the contract team!

Effective contractor monitoring depends more on the skills of the MONITORS than the monitoring methods

• A delicate balance of time and money vs the potential for disruption a service delivery.


Examples of Automated Systems

RAQS

TQRDC

VPM

On a scale from 1 to 5 what is the average score you give to your contractors when you

do evaluations?

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0

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17

121. Poor2. Acceptable3. Standard4. Good5. Excellent

Central tendency State of Florida

>= 1.00 to <= 2.80 >= 2.81 to <= 3.20 >= 3.21 to <= 5.000%

10%

20%

30%

40%

50%

60%

70%

3%

66%

31%

Overall Rating

Overall Rating

5105 Surveys conducted in April 2010

Ministry of Transportation Ontario

MTO uses the Registry, Appraisal & Qualification System (RAQS) to manage vendor qualification and vendor performance for infrastructure procurement

RAQS is an integrated solution with support for:• MTO user roles • Process workflows• Internal system interaction• Internal and external communications

RAQS Key Functional Areas

– Vendor management• Vendor registration & qualification• Vendor performance assessment• Vendor rating

– Project tendering• Project notice advertising• Document distribution• Contractor communications

– Bid results and evaluation• Results evaluation / trend analysis• Awards

Simplified 3M team rating (TQRDC)

T – Technology

Q – Quality

R – Responsiveness

D – Delivery

C – Cost

Courtesy: Jeff van GeelManager Sourcing & Accounts Payable

Simplified Scorecard

1. Focus on improvement

2. Present facets of performance without aggregation. Do not dilute message.

3. Communicate dashboard – detail in meeting

4. Scope: all material & services


All information for exercise only


1.Construction – Commodity - Contract2.Contractor - Consultant3.Consistency - Customizable4.Crowdsourcing – Collaborative - Comments5.Compare - Contrast6.Credible – Context7.Cost

7 C’S FOR CONSIDERATION

WWW.CSOLUTIONS.ORGWWW.CMC-CANADA.CA WWW.DOINGBUSINESS.MGS.GOV.ON.CA/

http://www.ontario.ca/en/residents/index.htm

VISUAL PERFORMANCE MANAGEMENT

ABC Contracting Grand River Excavation

Ford’s Landscaping

FILLING OUT EVALUATION

• For ratings that are “Below Standard” and explanation must be entered

Easy to create, fill out and explain!

Easy colour coding to spot what needs to be reviewed quickly.

Data can be exported for further calculations/analysis if required.

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25%

8%

10%

5%

15%16%

4%

17%

1. Effective communication throughout engagement

2. Quality of resources3. Availability of resources to carry

out contract4. Quality of the final deliverables5. Providing value added services6. Maintaining timelines/deadlines7. Budget/cost control8. Having a vendor contact for

dispute resolution

WHAT IS IMPORTANT FOR AN EFFECTIVE CONTRACT?

Survey Says

What are your greatest challenges to having an effective VPM!

Pick more than one!

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30

25

9

15

4

15

1. Not enough time2. End user input difficult to

get3. Poor systems4. Not required5. Missing linkage between

contract and performance6. Comparative Consistency

Do you share performance results with contractors - consultants?

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1. Yes2. No

Do you tie performance management data to proposal evaluations and selection?

1. Yes2. No

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COMMENTS – CONCERNS - CONFERENCE

CONTACT – CALL - COSTING

Gerald Ford [email protected]

226-474-1169905-296-4003

53

Leopold Koff [email protected]

Kim Dooling [email protected]

Corporate sponsors

mailto:[email protected]



Visual performance Management Oct 20 OIPMAC

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