Wednesday, July 9, 2008

Value Chain / Supply Chain Benchmarking and Studies Report Update

As I was researching online survey tools (in preparation for a metrics survey) I discovered MarketingProfs. For many of you who are in the supply chain space, it may seem irrelevant to consider marketing sites and research. For those of you who are in the value chain space (or read my entry Logistics – Supply Chain – Value Chain: Evolution of an Idea or Different Approaches?) you recognize that marketing (a demand creation process) may be a key to driving business improvement.

On their research page, Marketing Profs lists a number of studies including an annual survey investigating the use of Return on Investment (ROI) measurements to evaluate marketing effectiveness. From their home page, I linked to the MarketingProfs Daily Fix, a blog associated with the site. The blog has multiple contributors (including Tom Peters - a noted author in the field of business management). Because of the number of contributors, there may be multiple entries for a single day and there is a significant archive.

For example, a recent contribution by Ted Mininni, a contributor to the blog, commented and summarized a Marketing Daily interview with The CMO Council regarding a survey conducted by The CMO Council and the Boston Consulting Group of 1000 senior marketing execs. If you are not a marketing professional or familiar with the news, research, and tools of the field, the blog provides a useful (non-academic) starting point.

As a result of my quick investigation, I have added the Boston Consulting Group, the CMO Council, and Marketing Profs to my Update on Value Chain Benchmark and Surveys.

The following Update includes surveys with 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.

Tuesday, July 8, 2008

Value Chain/Supply Chain Benchmarking and Studies Report Update

In this, the latest revision of the supply chain and value chain benchmark report and studies list (the spreadsheet of links is embedded below), I have added PRTM. Many of you already know of the relationship between the Performance Measurement Group (PMG) and PRTM. While there are links and references between the PMG and PRTM websites, studies and reports are highlighted differently on each.

Those of you who pay attention to trade journals and press announcements for supply chain management have probably seen that PRTM has released its sixth annual survey of global supply chain trends. PRTM indicates they have 300 international respondents which, based on numbers alone, makes it a respectable survey.

According to PRTM's site, the survey was designed to investigate how industry leaders are globalizing their supply chain operations and considered: the future configuration of supply chain networks, managing product quality and safety while managing numerous internal and external international channel partners, and supply chain flexibility.

The following Update includes surveys with 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.

Sunday, July 6, 2008

The Continuing Search for Standard KPIs and Metrics

Last month I started identifying sources for KPIs and Metrics. In my initial entry I included a short description and links to:

The KPI Library
The Palladium Group

I have also had previous entries on BPIR.COM (affiliated with Massey) which provides members access to a library of metrics.

Cranfield University's School of Management offers a catalogue of performance measurements organized around a framework called the Performance Prism. The Performance Prism is a measurement and management framework that attempts to address all of an organisation’s stakeholders - investors, customers & intermediaries, employees, suppliers, regulators and communities. While the Catalogue costs £95.00, Cranfield lets you sample it (including a glossary list of the metrics).

The advertisement for the publication indicates that it includes:

  • The title of the measure.
  • Why it should be measured.
  • The role of the measure in different contexts.
  • How to measure it. Definition / formula of the measure – providing possible options
    What do we need to consider when defining the measure ? Definitions of key terms, possible sources of data, ways in which the data should be analysed, questions to be asked when using the measure

Another resource that I would recommend is Better A website run and maintained by SAS, it is not a typical commercial website. SAS does a respectable job in keeping advertising to a minimum and providing readers with access to a wide-range of articles, white papers, and research (much of it that does not originate with SAS). I have not found a KPI library on the site but exploring the resources should provide ideas and references for trying to identify the right metrics or KPIs to use.

Saturday, July 5, 2008

Reengineering Performance Measurement: How to Align Systems to Improve Processes, Products, and Profits

One of the first books I added to my personal library that specifically addressed using a systemic approach to using KPIs and metrics to improve business performance was Reengineering Performance Measurement by Lockamy and Cox.

Part of the Irwin/APICS Series in Production Management, it was written in 1994 and I must confess it has been a while since I picked it up. I spent a few days re-reading it and, even though it is a bit dated, there are a number of reasons why it is still a valuable resource.

The first part of this book is a review of practice and theory in quality management and manufacturing management systems. The second half of the book is a series of six case studies including: Reliance Electric, Yamaha Motor Manufacturing, Northern Telecom, Clark Equipment Company, Trane, and Colgate-Palmolive (Hill's Pet Products Division).

One might think that any book that is over a decade old in the "rapidly" evolving field of value chain practice will have little relevance to the practitioner. Since Lockamy and Cox had to take the time to explain "new" concepts and methodologies to the business community, they provided concise explanations that are still perfectly suited for introducing some basic complex and powerful ideas.

First, the authors put their work in the context of a "resource management" - the planning, scheduling and control of an organization's resources to produce a product or service to satisfy a customer. They relied on the a framework that was advanced by APICS (then. an organization for enterprise resource management) that included: product design, purchasing, manufacturing, distribution, and customer service.

(I was very aware of the contribution that APICS its members made to the evolution of supply chain management and the Supply-Chain Council. When I led the technical development of the SCOR Model as the SCC's Chief Technology Officer , I engineered a partnership with the APICS E&R Foundation in which we co-sponsored supply chain research. Many of the Council's technical committees relied heavily on the APICS Dictionary, which is still one of my valued resources. I have always thought that if APICS had quickly embraced "supply chain" - instead of resource management - they could have dominated the supply chain space. While they appear to have retrenched into professional certifications and training, if they staked out the intellectual high ground in value chain - they could probably lead professionals for the foreseeable future.

Second, the authors provide an introduction to Just in Time Manufacturing (Toyota Production Systems and Lean), Total Quality Management (Juran, Deming, Crosby) and Theory of Constraints - Goldratt. For each of these major schools of thought, they provide a short summary of the key elements and usually an understandable explanation of what the element means.

For example, after providing a brief introduction to the Theory of Constraints, the authors provide an illustrative business example that shows how to construct a business plan/strategy using cost as a basis versus using constraints as the business driver. For those of you who are looking for a short, painless way to grasp the overarching concepts in each of these disciplines - Lockamy and Cox are a great starting point.

While Chapters 1-6 will provide a good grounding in philosophy and an explanation of how all of the methodology works, Chapters 8-13 are the fore mentioned case studies. They are short. They frequently don't provide all of the information that you might want. They do provide evidence for the linkage between the organization and the performance management system.

Chapter 7 compares and contrasts the companies in the case studies and their use of integrative performance management systems. Most of the comparisons are interesting. Most of the performance measurement system models still provide some insights to managers. I would expect this book, if it was revised or re-released today, to provide much more in the way of specific advice regarding which metrics to employ and which to avoid.

For the manager or analyst that is looking for a list of KPIs and metrics that they can lift for their own use, prepare to be disappointed. You will have to do dig within the chapters to find the relevant metrics and you will probably have to supplement the book with additional research to determine how best to calculate the metric and apply it. For the manager or analyst who is looking for a starting place to find metrics and kpis that may be important - you have found an important resource.

My recommendation - whether you are a veteran or just learning TOC, TQM, JIT, and measurement systems; spend some time with this book. It won't become your primary resource but it may help to provide context and history that you will find invaluable.