Need discussion thread for each LA around 110-140 words. NOTE: used the reference that’s included
LA1: Instructor Insights contain possible measures for use in a Purchasing Balanced Scorecard. No one measure fits all scorecards.
For each of the 4 quadrants (sections) of the purchasing unit scorecard, pick (or create) one measure of most value to the VP SC in a firm of your choice. Be sure to explain your reasoning.
LA2: Describe at least 3 relevant performance measures you might employ to ensure that you satisfy your final project assignment for next week on time, with quality, and completely.
There are several reasons to measure performance:
To support better decision-making
To improve the focus of business communications
To assess feedback or results in time to act responsively
To direct talents toward reducing risk and improving outcomes
To determine a basis for performance rewards or penalties
To drive the most effective performance possible
But, measurement is not free.
– Some measures are simple to collect; some far more difficult.
– Measures are easy when relevant data is readily available.
– Yet, beware of too much data and too many measures.
– Be careful that measures are distinctive, not overlapping.
– It’s a balancing act.
– That’s why you might consider balancing your SC scorecard(s).
A scorecard is highly business sensitive. You track vital problem trends, and then remove them from the scorecard after they improve! Score carding is a serious save-the-firm set of critical performance measures.
There is no established industry standard for score carding. You start with the most debilitating problems and fix them first.
Often there is an inherent flow to scorecard from training to strategic outcomes. What follows are some potential metrics that the purchasing unit in an SC might use:
Scorecard Quadrant 1 – Training and Mentoring – The Foundation
% of purchasing workforce trained
% untrained scheduled for training
% trained who are qualified – by key positions
% mentored for professional development
% mentored who qualified – by key positions
% suppliers trained in key skills
% employees certified as CPM
Continuing education units earned/skill
Employee training satisfaction scores
Scorecard Quadrant 2 – Purchasing Skills Applied – The Performers
Internal customer complaints – by skill
External customer complaints – by skill
% of suppliers certified by key skill
% CPMs holding key positions / required
% skills mastered / skills required
Supervisor’s evaluation trends
Employee climate survey scores
Letters of appreciation received
Value of employee performance rewards
% negotiations that met business goals
% suppliers with high cooperation scores
Employee retention rate
Scorecard Quadrant 3 – Commodity Councils – Internal Outcomes
% on-time delivery – by council
% on-time delivery – by suppliers
QA inspection pass rate/ total attempts
Internal customer complaints – by process
External customer complaints – by process
Value of TOC reductions realized/ planned
Value of supplier innovations/ planned
Value of standard items/ total
% internal target prices reached
% outsourced target prices met
# of preferred suppliers/ total supply base
# of compliant suppliers/ total
# of suppliers replaced/ total
# single source suppliers/ total
# of purchase card transactions/ total
% successful performance audits/ total
Supplier satisfaction scores by council
Council satisfaction scores by suppliers
Litigation costs by product/ total product revenue
IT availability/accuracy for supply chain support
Average lead-time of non-standard items
# of error-free RFPs / total
# of error-free awards / total
Purchasing budget adjustments, +/-
Trend in transportation costs – by cause
Cost of regulation compliance
Audited savings from market / industry research
Scorecard Quadrant 4 – Strategic Outcomes
Customer satisfaction by product (mission success rate)
% reduction in purchasing spend
% reduction in inventory realized
% of suppliers/partners in early product design
Improvement in inventory turnover
% of stock-outs or back-orders
Return on purchasing investments (savings realized)
% purchasing strategic objectives met
Revenues for new or improved products
New product time-to-market/ goal (time-to-deploy)
% successful partnerships/ total
Forecasting accuracy rate
The real skill in score carding is to select the worst performance drivers,
then resolve them and go on to the next worst.
Some business people refer to it as “confronting the brutal facts.”
FYI: for measures of satisfaction, many scorecards use strongly agree to strongly disagree scales – to assess trends.
Navy Admiral Grace Hopper once said, “One accurate measurement is worth a thousand expert opinions!“