Invitation from the Global Benchmarking Network and Massey University

Dr. Robin Mann of COER and BPIR.com was kind enough to comment on my previous entry and extend an invitation to the readers of this blog. I would like to relay this to you, thank him, and encourage you to participate.

From Dr. Mann:

"The Centre for Organisational Excellence Research (COER), Massey
University, on behalf of the Global Benchmarking Network (www.globalbenchmarking.org) is conducting research to identify the current status of business improvement tool use worldwide. To assist with this important research we encourage you or a representative from your organisation to complete the electronic survey at http://gbn.bpir.sgizmo.com/.

It will take between 5 to 45 minutes of your time dependent on your use of
benchmarking. Those that do not use benchmarking only complete Sections 1 and 2 of the survey – this will only take 5-10 minutes of your time.

The person completing the survey should have a good understanding of the business improvement tools being used within your organisation. The survey is relevant to small organisations from one or two people to large multinational organisations.

The findings from the research will help to provide an understanding of the use of business improvement tools worldwide and how use varies from country to country. Already there has been over 400 responses.

In return for completing the survey you will be sent a copy of the findings and given one month’s FREE access to www.bpir.com (a benchmarking and best practice website resource).

In addition, one lucky winner that completes all sections of the survey will be invited to the GBN’s 3rd International Benchmarking Conference, Budapest, Hungary – 9/10 October 2008, www.bestpracticeconference.com. Conference fee and accommodation for three nights will be paid by the GBN.

Thank you for your participation."

Supply Chain/Value Chain Models - Quality Frameworks and Web Resources

If you are interested in value chain business and process improvement you have undoubtedly run across a number of the national quality award programs and frameworks. These frameworks frequently explore the "soft" discipline of business operations (critical organizational capabilities with impact that may be difficult to quantify - e.g., leadership, learning, societal impact) while they may not be as specific as the operational process frameworks.


BPIR.com provides a brief overview of some of the most recognizable of these frameworks including:

Baldrige Criteria for Performance Excellence
EFQM Excellence Model
Singapore Quality Award Framework
Canadian Framework for Business Excellence
Australian Business Awards

The website claims to provide a repository of over 1000 business metrics (available to BPIR members), benchmark and best practice, and access to business periodicals and journals. A review of the membership fee structure indicates that only a modest fee is required for individuals or companies. If the membership fees are as advertised the website might be an undervalued resource for value chain improvement.

The BPIR.com website was developed by the Centre for Organisational Excellence Research (COER), Massey University. The BPIR started out as a project within COER where a team carried out research on what support is provided to organisations, via the internet, to help improve business performance. The foundation and interest behind the research was linked to the experience of the team as business excellence evaluators using the EFQM and Baldrige models.

Supply Chain/Value Chain Models - Business Process Model Wars Update

Price Waterhouse Coopers, one of the largest consulting groups, has a process framework that is strikingly similar to the hierarchical models maintained by many of the trade associations that I have identified previously (and you can find in my list). They describe the framework as:

The universal Process classification framework contains 13 business processes that apply to almost any business, regardless of industry, size, or location. The first seven are operating processes that companies follow to develop and move products to the market. The last six are management and support processes that enable companies to operate effectively.

Probably all of the major consultants have process views of the enterprise. The majority of them have process organizations that vary by industry (and can be tailored to a company).

There are competitive advantages to using an industry-specific process framework. First, everyone believes that their industry and company are unique. In fact, they probably are, at some level. Second, if you are a consultant or a software provider that already has a presence in an industry, an industry-specific view (hopefully supported by reference accounts) can create barriers to your competition.

When you are working on business problems that span your business, your suppliers, and your customers, there are advantages to using an-industry neutral process framework and classification. Similarly, if you are a large consultant with projects supporting multiple industries and multiple businesses, there are advantages in using a framework that can be applied from the top down. Process models are the "standards" or banners in the escalating battle for the hearts, minds, and dollars of analysts, technologists, consultants, business process engineers, program managers, and business leaders.

APQP - Advanced Product Quality Planning - Automotive Industry Action Group

CCOR - Customer Chain Operations Reference Model - Supply-Chain Council, Inc.

CPFR -Collaborative Planning, Forecasting, and Replenishment Model-Voluntary InterIndustry Commerce Standards Association

DCOR - Design Chain Operations Reference Model - Supply-Chain Council, Inc.

DFSS - Design for Six Sigma - (Multiple Models)

eTOM - Enhanced Telcom Operations Map - TM Forum

MSDF - Manufacturing System Design Framework - Lean Advancement Initiative

PCF - Process Classification Framework - APQC

PWC Universal Process Classification Framework - Price Waterhouse Coopers

SAP- SAP Enterprise Services Workplace

SCOR - Supply Chain Operations Reference Model - Supply-Chain Council, Inc.

SCMF - Supply Chain Management Framework - SCM-Institute

VRM - Value Reference Model - Value-Chain Group

Technical but related frameworks

FERA - Federated Enterprise Reference Architecture - CPDA

ITIL - Information Technology Infrastructure Library

Corrections, additions, and amplifications are welcome.

Key Perfrormance Indicators: Developing, Implementing, and Using Winning KPIs

David Gerbino had been kind enough to provide feedback to the blog entry I made on business measurement standards and KPIs. He recommended two books, one of them, Key Performance Indicators by David Parmenter, is already in my personal library.

Parmenter, a consultant who assists organizations in applying KPIs, lays out basic strategy for selecting and applying KPIs in an organization. The book is a reasonably good resource for someone starting to consider systematically applying a measurement strategy across an organization. It is also a valuable resource for someone who has a grasp of measurement systems but is interested in seeing some specific examples.

I was pleased to see that he spends some time trying to explain the difference between key performance indicators (KPIs), performance indicators (PIs) and key results indicators (KRIs). While I use different definitions than Parmenter, I must confess that I had been working with measurements for a few years before I recognized the importance of explicitly differentiating a metric, a measurement, and a key performance indicator.

Parmenter points out:

Performance measures are meaningless unless they are linked to the organization's current CSFs [critical success factors], the balanced scorecard (BSC) perspectives, and the organization's strategic objectives.

I found Parmenter's recommendations for choosing KPIs, gaining consensus, and implementing to be less helpful but, they will certainly provide ideas and cautions. In the years I have worked with large multi-national corporations, I never encountered a KPI team. The business measurement or benchmarking "teams" that I worked with or met were project teams supporting specific business objectives.

One of the most important resources in the book for me is the Performance Measures Database contained in the Appendix. The table provide a fairly extensive list of metrics to consider and suggests a possible relationship between a Balanced Scorecard perspective and strategic objectives. It is helpful (but not necessary) if you are familiar with Kaplan and Norton's Balanced Scorecard. The database is a subset of the Waymark Database of Performance Measures (proprietary to Parmenter's firm) which apparently can be purchased for a fee from their website.

In summary, Key Performance Indicators is a good reference for anyone who needs to use KPIs. If you were going to assemble a measurement team, assign a KPI executive or manager, or hire a consultant to design, implement and use KPIs, you might want to read this book first.

Value Chain/Supply Chain Benchmarking and Studies Report Update

This is the latest revision of the supply chain and value chain benchmark report and studies list.

Recently, as I was searching for KPIs and metrics, I stumbled across the American Customer Satisfaction Index (ACSI).

One of the few benchmarking services that I have found that specifically attempts to measure customer satisfaction, the ACSI is administered by the National Quality Research Center at the University of Michigan's Ross Business School. Research support is provided by the Business School, the American Society for Quality (AQS), and the CFI Group.

According to their information page:

ACSI reports scores on a 0-100 scale at the national level and produces indexes for 10 economic sectors, 43 industries (including e-commerce and e-business) and more than 200 companies and federal or local government agencies. In addition to the company-level satisfaction scores, ACSI produces scores for the causes and consequences of customer satisfaction and their relationships. The measured companies, industries, and sectors are broadly representative of the U.S. economy serving American households.

The ASCI website also lists corporate sponsorships from some of the premier firms in the United States. It is possible, according to the website, to obtain additional services that allow benchmarking with your peers, with companies outside your industry, and to use predictive capabilities to estimate how your performance in satisfying your customers will effect your future business performance.

The surveys are links which are clickable and should open to their respective sites. I envision that future additions will add more benchmark reports, provide a short description for the surveys, and identify what part of the value chain / supply chain is included in the report.If you are aware of a benchmarking study or resource that should be included in this report please let me know.

Marketing Metrics: 50+ Metrics Every Executive Should Master

If you rely on books, white papers, and journals to stay current in the theory and practice of value chain improvement you probably see a lot of the material that is disappointing. I thought I would pass along some of the resources that I have found helpful and tell you why. I have begun inviting others to provide a review of materials they find helpful.

Recently, I stumbled across Marketing Metrics: 50+ Metrics Every Executive Should Master by Farris, Bendle, Pfeifer, and Reibstein and published by Wharton School Publishing. Published in 2006, I found it only recently. It is one of those books that you know will prove to be a reference that you return to over and over again.

While the book was written for marketers, it is equally valuable for strategists and planners, operations and finance executives, and IT departments. Consultants and value chain executives should be expected to have more than a passing familiarity with the contents. I would use the list of metrics as part of a checklist for anyone who was trying to sell me an executive dashboard or business analytic solution.

This isn't an introduction to marketing and is not the starting point for someone who is trying to figure out how marketing fits into a value chain approach. On the other hand, you do not have to be a career marketer to understand how the metrics will provide insight into how your business is operating. Manufacturers may better understand what drives their customers by looking at retail measurements. An inventory planner may not know what "lift" is from a marketing perspective but they certainly understand the increased demand that is driven by promotion.

To help readers that are being introduced to the concepts or the measurements for the first time, the authors provide examples. The examples are mini-business cases that attempt to illustrate how and why the measurements are used in practical applications. Don't be surprised that this book reads like a reference / text book. It is readable and understandable.

Within the first chapter, the authors provide a Major Metrics List which details the measurements that they discuss and the section of the book that will discuss that metric. The book includes Chapters for:

• Shares of Hears, Minds, and Markets
• Margins and Profits
• Product and Portfolio Management
• Customer Profitability
• Sales Force and Channel Management
• Pricing Strategy
• Promotion
• Advertising, Media and Web Metrics
• Marketing and Finance

In each Chapter, there are sections that detail the definition of the metric, the purpose of the metric, how the metric is constructed, what the sources are for the data to compile the metric, and what other metrics or concepts might be related.

I have spent a considerable number of years looking at supply chain and financial metrics, I have spent less time looking at those performance measures that provide insight into how effectively a company market or spends its marketing dollars. I have seen many of these metrics before. I haven't seen all of these metrics in one place with the concise treatment they are provided here. (By the way, I count a lot more than 50 metrics that are described in the book).

So, if your business view of the value chain requires your understanding and measurement of demand generation activities this book probably belongs on your shelf.

In Search of Business Performance Measurement Standards

A sizable percentage of the people who find my blog for the first time are searching for specific answers. A number of you are trying to find a list of key performance metrics (KPIs) or how to calculate OTIF (on time in full), or how stock-outs effect revenue.


While a number of my posts deal with concepts, theory, and framework, the practical questions of how and what to measure have been one of the principle elements that have kept me interested in this area.


In the past few months I have been trying to use LinkedIn as a collaborative resource to find technical answers. I first tried to use the network tool to find benchmark programs and surveys but I had very little luck. Of course it is hard to determine whether I phrased the question poorly, few were interested in the subject, or the question didn't reach the right people.


Recently I asked people to identify their sources for KPI and metrics. I have been pleasantly surprised by the willingness of very knowledgeable professionals to share their experience. A number of them have volunteered to collaborate in the future.


As a result of the email exchanges with these professionals I am starting to assemble at least one other resource list that I will post and try to maintain as a living document - Metrics Resources.


The goal of my search has been a neutral respository of business metrics, preferably a handbook of definitions, formula, and discussions of how and why to collect them. While I haven't found that source, people have been identifying resources which have proven interesting and useful.


While the initial list is taking shape, here are a few of the initial resources:


The KPI Library - A web site of Key Performance Indicator (KPI) libraries for finance, IT, supply chain, project and other business processes.

The Palladium Group - A web site (formerly the Balanced Scorecard Collaborative) relies on Kaplan and Norton's books on the Balanced Score Card to support a consulting practice. The body of knowledge in the books provides the basic concepts required for using the Balanced Scorecard approach and their are a number of consultants who are apparently qualified to teach / assist in the area. (Books will be listed separately).

APICS - A web site for the Association for Operations Management is a source of information in operations management, including production, inventory, supply chain, materials management, purchasing, and logistics. The APICS Dictionary (will be listed separately) was a primary resource of Supply Chain Council members as they were developing versions of the SCOR Model.

APQC - A web site for the metrics, benchmarking, and a process framework. Most content is premium (available to members - membership requires a subscription fee).

Besides assembling this list for publication, I will be providing short monograms on metrics. I expect the first metric to be treated this way will be On Time In Full.

Finally, I will be asking for your input. What resources do you use to identify and deploy metrics? How do you compare the calculations and the source of the business metrics between two dashboard systems? What books, websites, blogs are important if you are a professional in the value chain area? I will include my library (even standard reference books like the MBA Desk Reference and a Pocket Guide to Financial Ratios) as well as sources of information that others find important. (I have begun asking people if they would be willing to help assemble an annotated bibliography - books, white papers, web sites, and blogs and a metrics dictionary. Unfortunately, I didn't ask them if I could mention them in my blog or point to their sites. Part of the learning curve).

If you know a source of standard business metrics please let me know.