Tag Archives: Performance Management

A CHECKLIST FOR REDUCING SUPPLIER FAILURE

Do you depend on a key supplier?  Can you say yes to all these questions?

Understand your supplier

· How much do you really know about your suppliers?

· What evidence do you have to support your appraisal of their financial / legal / technical status?

· When was the last time you verified or validated the evidence?

· Are they operationally stable?

· What is their position in their own market niche, segment or sector?

· What do their competitors think of them?

· How resilient is their own downstream supply chain and how do you know?

· How will you know if the position changes?

Understand your dependence on your supplier

· What role do they play in your business?

· How dependent are you on them?

· What will it cost you if they fail?

· Do you have a contingency plan?

· What are the alternatives and how would you make a change?

Let your supplier know about you

· How strong is your relationship with your suppliers?

· How much do your suppliers know about you?

· Have you shared your business plan with your suppliers?

· Would they know enough about your business to recommend new services and products that could add value?

Have good information

· Do you have a strategy for managing supplier information?

· Is the information your suppliers provide reliable and how do you know?

· What evidence do you ask for in support of the information supplied?

· Is it up to date and can you access it readily?

· How often do you review it?

· Do you have an early warning system?

Think risk

· How often do you scan the landscape in which you operate?

· What do you do with the data, information and knowledge acquired?

· How have you assessed the operating risk to your business?

· How resilient is your supply chain and when did you last check?

· What are the sources of risk to your supply chain, e.g. downstream demand, upstream supply, environment, etc?

· What are the risks to your supply chain and do you understand how they could impact your business?

· How effective are you at identifying, assessing and controlling risk?

· When were your business continuity / disaster recovery plans last tested and did they include your supply chain?

If you had a problem answering these questions  or you would like a review of the risk and resilience of your supply chain by consultants who have provided these services in both the public and private sectors please  contact us

The dangers of multi-sourcing

This article by Jonathan Cooper-Bagnall, head of sourcing consulting at PA Consulting appeared in the Independent on 10th November 2009.  it illustrates very well the challenge of making performance meaningful!

“Outsourcing is back on the agenda, with a multiple-supplier model. But as Jonathan Cooper-Bagnall says, a holistic approach is vital

The last recession, in the early years of the last decade, fuelled considerable debate on the value of outsourcing. Many organisations saw it as an opportunity to secure cost reductions by awarding large and often complex outsourcing contracts to the world’s leading service providers. Although outsourcing was not a new phenomenon, the scale of deals signed, the number of jobs moved to offshore locations, and the speed of the change, provoked concern as to whether this was sustainable and appropriate.

Today, the outsourcing debate is raging again. Public and private sector organisations are looking to strip more costs from their operations by further outsourcing and offshoring. Many already have experience of outsourcing, but that experience has been mixed. The scale of the earlier outsourcing and offshoring has proved sustainable. However, some contracts have not delivered as a result of rushed contract execution and underinvestment in the transition to new suppliers, and the management of those suppliers. Those mistakes need to be avoided this time round.

Any organisation considering outsourcing needs to answer the question of how the delivery of operations can be restructured so that it takes advantage of the outsourcing provider’s skills. According to PA’s 2009 International Outsourcing Survey, organisations are planning to break up the large, complex contracts and move to a set of smaller contracts with multiple suppliers. The perception is that this will deliver much-needed cost reduction, and that this multi-sourcing approach enhances competition and offers a more flexible and agile delivery of operations…..”

More at this link

Making Performance Meaningful with KPIs

Key Performance Indicators (KPIs) help an organization define and measure progress toward organizational goals.

Do you have good KPIs defined?  Are they ones that reflect your organization’s goals, ones that you can measure and that you can use as a performance management tool?  If so, you can use them as a stick to improve performance but much more positively you can use them as a carrot.

KPIs give everyone in the organization a clear picture of what is important and what they need to make happen.  You can use them to make sure that everything the people in your organization do is focused on meeting or exceeding your KPIs.   Publicize them and post them everywhere: in the lift lobbies, on the walls of every conference room, on the company intranet and certainly on the company web site!    Show what the target for each KPI is and the progress toward that target for each of them. Use them to get real engagement within the organization and across your supply chain.

But what are KPIs?  Once an organization has analyzed its mission, identified all its stakeholders, defined its goals and agreed a set of ‘critical success factors, it needs a way to measure progress toward those goals. KPIs are those measurements.  They should be quantifiable measurements, agreed to beforehand, that reflect the ‘critical success factors’ of the organization. They will differ depending on the organization. Some may be financial e.g. the percentage of  turnover coming from a particular region, some may be transactional e. g. number of helpdesk calls answered in a fixed time.  What matters is that they reflect the organization’s goals, they must be key to its success, and they must be SMART (Specific, Measurable, Achievable, Relevant and Time Bound) .

If a KPI is going to be of any value, there must be a way to accurately define and measure it.  For example to be the lead organization in a particular sector sounds good but how do you really know when you get there.  Not only must they be measurable but you must have systems in place to do the measuring – for example, if you are not prepared to invest in software to measure how quickly the phones are answered, don’t set that as a KPI!

Real value comes from staying with the same definition from year to year so that you can compare results over time and look at trends.   You can use KPIs to set challenging targets e.g. year on year improvements.     For example a 5% increase  in sales is something employees can understand and take specific action to accomplish.

In selecting KPIs   it is important to limit them to those factors that are essential to the organization reaching its goals. It is also important to keep the number of KPI’s small just to keep everyone’s attention focused on achieving the same KPIs.  That is not to say, for instance, that a company will have only three or four KPIs in total. Rather there will be three or four Key Performance Indicators for the organization at corporate level and the business units within it may have three, four, or five KPIs that support the overall company goals and can be “rolled up” into them.

Selecting the  right KPIs can be a key to ensuring your organization achieves real performance success.  If you would like advice on selecting KPIs for your organization or if you would like assurance that your performance measures are working effectively, G&W Consulting can provide you with support

For more information you can contact us at this link