Most consultants” recipes for effecting business change and behavior in an organization use ingredients for measuring ongoing performance. Many feel that continuous improvement in an organization relies on “measuring, measuring, and measuring again.” Once a company””s road map for change is laid out, it can develop a set of performance metrics or key performance indicators (KPIs) to ensure that it knows when it is meeting its objectives.
Such organizations should choose a limited number of metrics and align executive to management-level measures. The current interest in performance measurements has led to a variety of supporting adages or cliches in the industry, such as: • “Anything measured improves.” • “What you measure is what you get.” • “Anything measured gets done.” • “You can’t manage what you do not measure.” These are not new business ideas, but there are a few new twists. Using measurements to support manufacturing operations has its roots back to the late 19th and early 20th centuries with ideas espoused by Frederick W. Taylor, the father of applying scientific methods to running business. His ideas for time and motion studies of operations were successfully used to scientifically manage production lines and warehouse operations. These ideas, however, led to exaggerated business processes that transitioned into “running a business by the stopwatch” with employers treating human employees as if they were highly reliable, predictable machines to be monitored and controlled.
Jul 31, 2018 - It first explains the supply chain performance drivers as well as the value. Measuring the supply chain is challenging due to various reasons,. Jan 20, 2016 - Explain the role of the major drivers of the supply chain performance. And information sharing across various facilities in the supply chain.
Over time, the workplace’s view of performance measurement became more humane and these exaggerated types of monitor and control methods fell out of favor, replaced by a focus on a measuring a business’ performance rather than that of the individual. Throughout the last decade, companies have expended significant amounts of time and effort to re-engineer their supply chains through business process change and technology focused on implementing integrated Supply Chain Management (SCM) principles. While substantial financial and human resources have been spent on doing this, there has been little sign of realized benefits. While consultants are recommending supply chain measurement, they generally lack formal approaches to it. In addition, while SCM software providers are selling solutions that enable companies to drastically improve their supply chain performance, these same vendors do not adequately provide tools needed to measure these improvements. In this report, AMR Research discusses supply chain performance measurement and the results of research conducted to address the following questions.
• Why is performance measurement important? • What general approaches are available to measure supply chains? • What advice can be followed when selecting performance measures? • What methods are available for setting performance targets? • What are application vendors doing to support supply chain performance measurement?
• How should a company get started? Why Is Performance Measurement Important? Measurement is important, as it affects behavior that impacts supply chain performance.
As such, performance measurement provides the means by which a company can assess whether its supply chain has improved or degraded. The importance of using measures to help ensure that a supply chain is performing well can be illustrated by the following anecdotal story: Tom is driving on a long trip in a car that has a broken speedometer and a broken gas gauge.
He has been traveling for several hours, keeping track of the time and looking at his odometer to determine how fast he is going. He is sure that he has been obeying the speed limits – when he is stopped by a patrolman and given a speeding ticket.
Slowing down, he drives for two more hours keeping track of the time and his odometer, but once again is stopped by a patrolman and given another speeding ticket. During the remainder of the trip Tom slows down to a speed that he now believes will avoid getting another speeding ticket. He drives for one more hour when the car stops all of a sudden. He ran out of gas! Not a very good trip for Tom, primarily because he was missing some very important key measurement devices in his car – the speedometer and the gas gauge. Unlike Tom, most people would be extremely reluctant to drive this car.