Strategic Supply Chain Management - Supply Chain Online

CHAPTER 5 Core Discipline 5: Use Metrics to Drive Business Success 213
FIGURE 5–9
Supply-chain scorecard for 3Com.
Customer Financial Operations People
Delivery
Predictability
Supply Chain
Costs (% of
Revenue)
Days of Supply
Voluntary
Attrition (Overall
Annualized)
Channel
Inventory
Supply Chain
Costs ($)
Material Turns
Voluntary
Attrition (Top 30)
Stockout %
Order Cycle
Time
Order
Management
Costs ($)
Quarterly
Material Cost
Reductions ($)
Material
Operational
Turns
Warranty/
Service
Inventory Turns
% Performance
Reviews Completed
On Time
Communications
RMA Delivery
Predictability
Skills Assessment/
Development
Quality (Failure
Rate)
Actual is better than or equal to plan
Actual is within 5% of plan
Actual is >5% off plan
Today, the worldwide operations scorecard resides on every 3Com
executive’s desktop and is used daily to monitor performance at both a
corporate and a functional level. At weekly executive staff meetings, each
functional area takes turns making a presentation that includes the summary
scorecard and an update on key initiatives that align with overall corporate
objectives. “This process has really helped our supply chain
organization focus on what’s important,” says Jim Ticknor, 3Com’s vice
president in charge of supply chain operations. “But even more, it has
helped all the groups see how their activities and decisions affect other
areas of the company.” 6
NEXT-GENERATION PERFORMANCE MANAGEMENT
Like 3Com, many organizations are moving away from a piecemeal
approach to performance management and toward a more holistic approach.
This means that supply chain performance management will become an
integral part of an overall performance-management strategy—what
Gartner calls “corporate performance management” (CPM).