Performance Measurement in SCM

8/8/2019 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)

Performance Measurement in SCM

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