Performance

Measurement in a
Supply Chain
Management
GROUP-7
Group Members
 MBAII-01 -> Phoo Shwe Aein
 MBAII-22 -> Aung Htay
 MBAII-24 -> May Thaw Htet
 MBAII-36 -> Thet Thet Khaing Kyaw
 MBAII-47 -> Shun Lai Pyae Sone Linn
 MBAII-52 -> Soe Min
 MBAII-67 -> Myat Su Naing
 MBAII-71 -> May Myat Noe
 MBAII-98 -> Thura Swe
2
Logistics Profile: Micros
and More…A Final Sequel
“If you can’t measure it, you can’t manage it.”; Micros
and More was uncertain if their recent gains were
appropriate.
Micros and More was unsure about ‘where they are’
and ‘where they have been’; this makes it difficult to
evaluate performance.
Developing a set of performance metrics will help
Micros and More chart a course for the future and
evaluate their performance along the way.

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Supply Chain Performance
Measurement: Introduction
The Micros and More logistics profile points out a
very important issue for all organizations: Each
needs performance measurements or metrics.
Achieving efficiency and effectiveness objectives
requires a set of standards to compare to actual
performance.
These standards are called metrics.

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Dimensions of
Performance Metrics
Establishing appropriate metrics is a complex
problem.
◦ Measuring inappropriate performance can lead
to a company chasing the wrong goal.
◦ Metrics drive behavior --- what you measure is
what you get.
Logistics cost metrics should focus on the total
supply chain, not on just one link.

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Figure (1).
Raising the Performance Bar

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Overview of Performance
Measurement
Figure (2) contains a list of performance measures
captured on a regular basis within companies.
Knowing what metrics to use is a very important
issue.
Figure (3) provides some insight into the
characteristics of good performance measures.

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Figure (2) Measures Captured on a Regular Basis
Within the Company

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9
Other Useful Performance
Guidelines
The metrics must be Use a balanced approach
consistent with overall in selecting and
developing metrics.
corporate strategy.
Precise cost
The metrics must focus measurement is an
on customer needs and important aspect for
expectations. gauging improvement.
Prioritize your metrics. Use technology to
enhance efficient
Focus upon processes performance
not functions. measurement.

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On the Line:
Measuring Performance
The current economic slowdown has sent many
companies looking for ways to cut costs and
improve productivity without increasing resources.
By establishing performance metrics throughout
the supply chain, companies are more likely to
reach overall corporate goals.
Systems such as KPIs, SCOR, and e-SCOR are being
used to develop these metrics.

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Categorizations
1. Evolution of Metrics Utilization
2. Performance Categories
3. Another Approach
4. Supply Chain matrix

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1. Evolution of Metrics Utilization
Most organizations go through several phases in
the development of meaningful metrics:
◦ Stage 1 – awareness of the importance of
using the appropriate metric
◦ Stage 2 – developing the actual metric
◦ Stage 3 – performance improvement
◦ Stage 4 – integration internally and across
the supply chain

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2. Performance
Categories
There are a number of approaches that can be used
to classify performance metrics.
The next two slides illustrate performance metrics:
◦ Figure (4) identifies four principle process measure
categories.
◦ Figure (5) shows various customer service metrics
and how important they are to customers.

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15
Figure (5) Do Customers Use These Measures to
Evaluate Your Performance?

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Figure (6) Logistics Quantification Pyramid

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3. Another Approach to
Metric Classification
The next four slides demonstrate other approaches
to metric classification:
◦ Figures (7) and (8) illustrate for ABC Power Tools,
cost and management of inventory metrics.
◦ Figure (9) shows basic logistics service outputs or
service performance for metrics development.
◦ Figure (10) shows the results of a 1999 survey of
the percentage of companies that measure
performance of each of the five service outputs
as well as the percentage that measures value.
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19
20
Figure (9) Logistics Outputs That
Influence Customer Service

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Figure (10) Service Measurement

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 4. Supply Chain
Metrics
Supply chain metrics are very different from
traditional logistics metrics in that they measure
inter-company performance rather than just
internal performance.
These measures of performance must be common
across the firms in the supply chain to be
meaningful.

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The Supply Chain Operations
Reference (SCOR) Model
This model was attempts to integrate well known concepts of
process reengineering, benchmarking, and process
measurement into a cross functional relationship by:
◦ Capturing the “as is” state of a process and derive the “to be”
future state (reengineering);
◦ Quantify the operational performance of similar companies
and establish “best of class” performance (benchmarking);
and,
◦ Characterize and describe the management processes that
will result in “best in class” performance (best practice
analysis).

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Figure (11) : SCOR is Based on Five Distinct
Management Processes

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THANK YOU AND
DISCUSSION TIME