Objectives and Metrics
Performance metrics must support corporate objectives and operational requirements for supply chain processes. Performance metrics must drive the gathering of data. Historically, the availability of data drives the metrics, which often produces lackluster performance improvement results.
Once performance metrics have been defined, they must be clearly communicated to the vendors or suppliers, and other supply chain stakeholders.
Measure Results
An Aberdeen Group supply chain study in November 2002 found that nearly 60% of enterprises are less than satisfied with their ability to consistently measure and manage supplier performance. Further, the study found that the typical supplier performance measurement program targets less than a third of the total supply base. A best-in-class Vendor Performance program will target 100% of vendors to maximize collaboration among supply chain stakeholders and optimize the benefits to the enterprise.
The 100% supplier target is more easily achieved if the vendor performance program leverages automated systems to perform as much of the performance-measuring activities as possible, allowing humans to do what they do best (analyze, evaluate, perform manual audits, and data entry).
All the Data, All the Time
Competent vendor performance programs capture and consolidate disparate data that is essential for comparing vendor performance with retailer expectations. The data must be accurate, current, and complete. The vendor performance system must facilitate access to the data for all stakeholders. The result is a supply chain data warehouse that is a single source of information that is relevant to end users and decision makers throughout the enterprise. Convenient access to reliable supply chain information encourages the use of that information to support supply chain improvement activities.
Collaborating with Shared Space
Effective collaboration requires effective communication of intent, objectives, limitations, constraints, plans, information, and expectations in an environment of mutual respect for the needs of other stakeholders.
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