Supply Chain Performance
Evaluation
Course Contents - Weekly Agenda
1. Intro to Supply Chain, Models & Perf. Evaluation
2. Application of SCPE Tools within the Supply Chain
3. SCOR Model
4. SCOR Model (Continued)
5. SCOR Case Study
6. Supply Chain in Industry 4.0, Smarter SC & Analytics
7. Mid Term Exam
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Course Contents - Weekly Agenda
8. Balanced Scorecard (BSC)
9. Strategic Assessment, Alignment & Mapping
10. Supply Chain Analytics using Software
11. --------------do-----------------------------
12. --------------do-----------------------------
13. Project Presentations
14. Final Exam
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Application of SCPE Tools
What is Performance ?
• Action or process of performing a task or function.
• How average or How Well the activity is performed ?
• Expectations Vs. Actual Results
• Every Org. would like to know about their Performance.
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Performance Measurement
Every System uses
FEEDBACK for continuous
Learning & Adaptation
Is it working? Is it actually working Is it working in
well ? economical way ?
Monitoring KPIs reveals
the GAP between Plan &
Execution
• Performance Measurement is a process of
quantifying the efficiency and effectiveness
of action(s). Neely et. al (1995)
• Complex, Critical, Confusing & Changing
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Terms & Tools Linked to “Performance”
Communic
Budgets KPIs Reports Meetings Rewards
ation
Performance
Dashboards Objectives Scorecards Discussions Targets
Reviews
Forums Plans Projects Trainings Technology
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Need for Performance Measurement
• To align activities & implement strategy that achieve objectives
• To improve efficiency or to reduce inefficiencies
• To obtain competitive advantage
• To determine interrelationship between functions
• To identify complexity
• To allocate benefits & risk uniformly
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Performance Measurement Answers
Behavior, Quality, Timeliness, Economics (Price or Cost),
Competence, Effectiveness, Completeness, Efficiency,
Satisfaction, Production, Governance, Compliance
Directed Questions To Help Measure The Right Things:
1) How much work do we do (Production)?
2) How well did we do the work (Quality, Timeliness, Economics, Efficiency)? Performance Measures are
3) How satisfied were our customers with our products and services (Satisfaction)? associated with Objectives
4) How well are we managing our resources (Effectiveness) ?
5) Are we following the rules and regulations (Governance, Compliance)?
6) How well did we work with others (Behavior)?
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Performance Measurement Dimensions
Behavior, Quality, Timeliness, Economics (Price or Cost), Competence,
Measure What ? Effectiveness, Completeness, Efficiency, Satisfaction, Production,
Governance, Compliance
Measure How ? Directly or Indirectly
Measure Type ? End Outcome, Intermediate Outcome, Output, Process, Project, Input
Measure Timing Leading or Lagging
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Terminology Standards
Objectives – start with Verbs Increase Customer Satisfaction
$ Revenue per customer
KPIs – start with Symbols # of Complaints
% Customer Satisfied
Initiatives – start with Nouns or Customer Relationship Management
Adjectives Software Implementation
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Performance Measurement – System Approach
Input Process Output Outcome
• Efficiency
• Investment • Customer Retention
• Throughput • Production Counts
Dollars • Employee Satisfaction
• Bottlenecks • Transactions
• Operating Dollars • Compliance
• Quality • Units Processed
• Resources • Profitability
• Cycle Time
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KPI Development
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Measuring Employee Satisfaction
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Alignment of Organizational Interest
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Strategy Pyramid
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Alignment of Supply Chain Interest
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Categorization of SC Performance Measures
Qualitative and Quantitative
Functional E.g. SCOR Processes (P, S, M, D, R, E)
Hierarchical :
Strategic, Tactical and Operational
Primary & Secondary (Indicator of why primary metric is high or low)
Other : Cost, Time, Quality, Flexibility and Innovativeness.
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Categorization of SC Performance Measures
SUPPLIER PLAN CUSTOMER
Forecast Accuracy Forecast Vs. Order
Total Inventory Days of Supply (TIDS) Forecast Volatility
Cash to Cash Cycle Time (CCCT) Days of Finished Goods
Planning Cycle Time Rate of Obsolete Inventory
SOURCE PRODUCTION DELIVERY
Supplier Fill Rate On Time Production
On Time Delivery
Auto P/O Rate Order Fill Rate
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Supply Chain Objectives
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Value for the Customer
Customer Customer Customer
Acquisition Satisfaction Retention
Product Image & Relation-
& Service Services ship
VALUE
Attributes
• Uniqueness • Brand Image Value Creation is optimal
• Trust
• Lead time If all SC stages manage to
• Responsiveness
• Price synchronize the physical,
• Ease
• Quality information & decision
• Functionality making processes !
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Value Attributes
Customer (C) Company (Co) Actors in the Chain (A)
• Lead Time (C1) • Profitability (Co1) • Sharing Information (A1)
• Price (C2) • Innovation (Co2) • Synchronized Decision (A2)
• Quality (C3) • Sharing Knowledge (Co3) • Sharing Resources (A3)
• Functionality (C4) • Invention (Co4) • Sharing Risk & Profits (A4)
• Brand Image (C5) • Growth (Co5) • Creation of Common
• Trust (C6) Knowledge (A5)
• Responsiveness (C7) • Shared Innovation (A6)
• Speed of the Chain (A7)
• Trust (A8)
• Sustainability (A9)
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Benchmarking
Benchmarking is a strategy tool used to compare the performance of the business processes and
products with the best performances of other companies inside and outside the industry.
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CMMI Capability Maturity Model Integration
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SCPM3 Supply Chain Process Management Maturity Model
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LPI Logistics Performance Index
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THANK YOU
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