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Performance Objectives

Supply chain organizations and strategies demand a set of metrics.
The appropriate supply chain key performance indicators (KPIs) aligned with the vision, mission, accountabilities and company strategic objectives help the organization deal effectively with problems and address pro-actively the challenges in the industry.
"Choosing the right metrics" is one of the most important aspects in developing operating model that works to optimize performance.

Balance Scorecard is a strategy performance management tool commonly used as a strategy execution framework. It has four perspectives where supply chain :

  • Financial: encourages the identification of a few relevant high-level financial measures. In particular, designers were encouraged to choose measures that helped inform the answer to the question "How do we look to shareholders?"
  • Customer: encourages the identification of measures that answer the question "How do customers see us?"
  • Internal business processes: encourages the identification of measures that answer the question "What must we excel at?"
  • Learning and growth: encourages the identification of measures that answer the question "How can we continue to improve, create value and innovate?".

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Balanced Scorecard is one of several tools for performance measurement and management.
It provides a more holistic approach rather than the traditional financial measures.
It incorporates both leading (forward-looking) and lagging (backward-looking) indicators. Emphasizes balance across multiple performance dimensions; ensuring that good performance in one area is not offset by poor performance elsewhere.

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Each organization is unique, which needs to follow its own path for developing a balanced scorecard. Some relevant strategic initiatives that are developed shall be aligned with company level strategy. Objective KPIs derived from the initiatives, where performance measures then shall be defined and right metrics are set.

1. Financial Metrics can help us to look at shareholders, by:

  • Budget Spend Optimization
  • Cost Reduction

2. Stakeholder Metrics:

  • Highly Compliance.
  • Competitive Position.
  • Perfect Goods/Services Provision.
  • Excellent QHSE Implementation.

3. Process Metrics is we must excel at,

  • Enhance Strategy sourcing and asset management.
  • Increase supply chain Effectiveness.
  • Sustainability supply chain operations.
  • Performance management system implement.
  • Risk management.

4. Knowledge metrics can help us to improve and create value, by:

  • Develop Competent Workforce.
  • Enhance Technology Utilization.

 

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