sc performance evaluation

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Supply Chain Management



Compiled by : Sachin Gawali - 9117

Harsh Parikh - 9138Manish Singh - 9154

Monica Doshi - 9178

Rasika Raje - 9201Neha Uchil - 9215

Presented to : Prof. Bawa Singh



Supply Chain

Suppliers Manufacturers Distribution Centers Customers

Material Costs

Transportation Cost T.C. T.C.

Inventory CostsManufacturing Costs



Why To Implement Supply Chain?



Impact Of Both Areas On Each Other

Poor ForecastingCustomer

Service

Impacted

Costs

Out of

Control

Too Many Orders

Poor Data Set up

Poor Paper Work

Incorrect Stock Levels

High delivery Costs

Errors in delivery

Cash Collection Impacted

Before Production After Production



Customer Development:

we can sell 200 Marketing:the promotion will sell 400

Manufacturing:

they will only

sell 150

Finance:

we have budget of 300

Lack of Synergy



Financial Planning

Demand Forecasting

Category Mgmt

Customer Service & DistributionManufacturing

Customer Development

Supplier Mgmt

Debtor Mgmt

One

Consensus

Plan

Working with Synergy



How To Measure Performance?

Benchmarking

Gap Analysis

Balanced Scorecard

SCOR Model



Benchmarking

Benchmarking is a standard of performance, which

helps an organization to identify standards of

performance of world class organization and

implement them in their own organization.

Forms of Benchmarking:

Internal

External

Quantitative

Process



World class

Current performanceWhere we are

Goal 1

Goal 2

Goal 3

Benchmarking - A Bird¶s Eye View



Benchmarking Model

Selection of Investigating Process

Selection of Benchmarking Partner

Information Collection

Finding Performance Gaps

Evaluating causes for the Gaps

Planning

Analysis



Fixing goals

Persuading the employees

Developing Action Plan

Implementing actions

Controlling

Benchmarking Model {contd«}

Integration

Implementation



Companies Practicing Benchmarking

Toyota

Ford

DuPont

Johnson & Johnson

Hindustan Unilever

Motorola

RPG group

Ranbaxy

Xerox

AT&T

Hewlett Packard

IBM

Citibank

Cannon

Arvind Mills

ACC



Gap Analysis

Gap Analysis is to find out the difference between

actual level of performance and expected level of

performance.

Activity Modeling:

³As is´

³To be´



Benefits Of Benchmarking

Better informed decisions

Exposure to innovation & breakthroughs

Think out of the box

Accelerates change



Mapping Out Time

50%30%

20%

Time

Planning

Information Gathering

Analysing Performance



Complexity Drivers

Pressure to reduce costs

Pursuit of new markets

Product innovations



Customers

Products

Technology

Differentiating Factors



Balanced Scorecard



What Is A Balanced Scorecard (BSC)?

A Balanced Scorecard covers 4 areas for

measurement.

Financial

Customer

Operational

Training



Customer perspective

Order fill rate

Back order levelsOTD

Operational

Adherence to plan

Forecast error

FinancialCost of manufacturing

Warehousing

Transportation & Returns

TrainingIn-house training hours

Balanced

Scorecard

Kaplan and Norton model (1996)



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How do you

create value?

Building The Balanced Scorecard



Cause and Effect Chain

Strategic Objective

What

Financial MeasureHow

Customer Value Measure

How

Process MeasureHow

Strategic Objective

Become No 1 player

What

Market shareHow

Service span offer

How

Services per customer How

Availability of data



Revised Performance System

Traditional

Balance of financial &

non-financial

performance

measures

Between strategic

objectives &performance

measures

Revised

Focus on non-

financial performance

measures

Only between

Strategic objectives



Annual order

Correctly filled

orders

Service order

failures

Rectified Orders Refused order

Invoice deduction

per order

Total orders

rehandled

Revenue per

order

Invoice deduction

from sales

Rehandling

cost per order

Lost revenue

sales

Rehandling cost

Supply Chain Service Failure



Capture the

³as-is´ state of aprocess and

derive the

desired ³to-be´

future state.

Quantify the

operationalperformance of

similar

companies &

establishinternal targets

based on

³best-in-class´

results.

Characterize the

managementpractices and

software

solutions that

result in³best-in-class´

performance.

BenchmarkingBest Practices

AnalysisBPR

Process Reference Model



Supplier

Plan

Customer¶s

Customer

Suppliers¶

Supplier

Make Delive

r

Source Make Deliver MakeSourceDeliver SourceDeliver

Internal of

ExternalInternal of

External

Your Company

Source

Return Return Return

Return ReturnReturn Return Return

Building Block Approach

Processes Metrics

Best Practice Technology

SCOR Structure

Customer



Plan

Develop a

course of

action that

best meetsSourcing,

Production

and Delivery

requirements

Source

Procure goods

and services to

meet Planned

or ActualDemand

Make

Transform

product to a

finished state

to meetPlanned

or Actual

Demand

Deliver

Provide

products

to meet

demand,including Order

Management,

Transportation

and

Distribution

Return

Return products, Post-delivery Customer Support



Number of days to achieve an unplanned 20%

change in orders without a cost penalty

Production

flexibility

Number of days for supply chain to respond to

an unplanned significant change in demand

without a cost penalty

Supply chain

response timeSupply Chain

Flexibility

Number of days from order receipt to customer

delivery

Order fulfillment

lead timeSupply Chain

Responsiveness

Percentage of orders delivered on time and in

full, perfectly matched with order with no errors

Perfect order

fulfillment

Percentage of orders shipped within24 hours

of order receipt

Fill rate

Percentage of orders delivered on time and in

full to the customer

Delivery

performanceSupply Chain

Delivery

Reliability

DefinitionPerformanceMetric

PerformanceAttribute

SCOR: Customer Facing



DefinitionPerformance

Metric

Performance

Attribute

SCOR: Internal Facing

Revenue divided by total assets including

working capital and fixed assets

Asset turns

Number of days that cash is tied up as

inventory

Inventory days of

supply

Number of days that cash is tied up as working

capital

Cash-to-cash

cycle timeSC Asset

Mgmt

Efficiency

Direct and indirect costs associated with

returns including defective, planned

maintenance and excess inventory

Warranty/return

processing cost

Direct material cost subtracted from revenue

and divided by the number of employees,

similar to sales per employee

Value-added

productivity

Direct cost of material and labor to produce a

product or service

Cost of goods

sold

Direct and indirect cost to plan, source and

deliver products and services

SC mgmt costSupply Chain

Cost



SCOR Model (Level 2)




S1.1

Schedule

Product

Deliveries

S1.2

Receive

Product

S1.3

Verify

Product

S1.4

Transfer

Product

S1.5

Authorize

Supplier

Payment



D1.1

Process

Inquiry &

Quote

D1.2

Receive

Enter &

Validate

Order

D1.3

Reserve

Inventory

Determine

Delivery

Date

D1.4

Consolid

ate

Orders

D1.5

Build

Loads

D1.6

Route

Shipment

D1.7

Select

Carriers

& Rate

Shipment

D1.14

Install

Product

D1.13

Receive

& Verify

Product

by

Customer

D1.12

Ship

Product

D1.11

Load

Product

&

Generate

Shipping

Docs

D1.10

Pack

product

D1.9

Pick

Product

D1.8

Receive

Product

from

Source or

Make




Raising The Bar



References

Supply Chain Management Book - Author - Altekar

www.scribd.com

www.managementparadise.com

www.authorstream.com

www.slideshare.com



Thank You

sc performance evaluation

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