Strategic Supply Chain Management - Supply Chain Online

202 Strategic Supply Chain Management
Measurements are
only useful to the
degree that they
enable timely
decision making.
a measurement falls outside a defined tolerance
level. Processes and workflows should
show which decisions are to be made, by
whom, and within which limits.
Use Your Metrics to Drive Continuous
Improvement
Gathering comprehensive benchmarking
data takes time and effort. And since most
benchmarking services charge a fee for participation and database access,
there’s usually an out-of-pocket cost as well. Logic would say that any
company willing to make this sort of investment would highly value the
resulting information and make every effort to leverage it. Yet, a recent
survey of hundreds of companies found that few had used their supplychain
metrics to drive strategic management practices, and most had failed
to realize a full return on investment from their benchmarking efforts. 4
This is true of many companies. Too often they review the benchmarking
information but don’t use it to move the company forward. Over time, the
data-collection effort no longer may seem worth the benefits achieved.
Develop an Implementation Plan
There are four major steps to putting a performance-management program
in place:
1. Set supply chain strategy objectives. Start with your company’s
business strategy, and then develop supply chain objectives that
support this strategy.
2. Choose supporting metrics and targets. Identify the specific
metrics and targets that you’ll use to track progress toward your
supply chain objectives.
3. Identify supporting initiatives. Develop performance-improvement
programs to help meet the supply chain objectives.
4. Implement the programs. Collect data and develop tools for
reviewing the data and to support decision making.
Set Supply Chain Strategy Objectives
Create supply chain objectives and priorities that support your company’s
business strategy. Although senior management may agree with the supply