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1、LONDONSHOPTHEDeveloping An Overview of Supply Chain Performance MetricsProcess, Recommendations- 2 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary and ConfidentialThis document gives an overview of the different metrics that can be used to measure supply chain performanceThe Supply Chain CoEs objecti
2、ve is to define a benchmarking framework capable of: Comparing generic metric performances for use on projects. Capturing further benchmarking data in a consistent format.The London Shops task: Develop an overview of the different metrics to measure supply chain performance. Select the most importan
3、t metrics that can be used across industries. Discuss how the most important metrics link other operational metrics within each stage of the supply chain. Suggest how the supply chain CoE should continue concerning this topic.- 3 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary and ConfidentialWe used
4、 information from several sources during our projectInternal and external documents: High level benchmarking framework for supply chain performance (H .Cook): Shop Study (March 1997) accessing information from available experts and past projects. Supply chain benchmarks and best practice (Dow Polyur
5、ethane & Epoxy April 1995). Supply Chain Benchmark Assessment (March 1997). Supply chain appraisal and benchmarks: (client X September 1997).Discussions with supply chain CoE: Graham Colclough. Andrew Morgan. Lee Sherman. Deborah Huff (Cap McKinsey).- 4 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary
6、 and ConfidentialPossible data sourcesCIPS (UK):Purchasing (& Supply Chain).APICS (US):Supply Chain.CAPS (US):Purchasing & Supply Chain (US & Legal):Research Benchmark Industry Listings (http:/www.capsresearch/htm).NAPM (US):Purchasing.Kaiser Associates:Benchmark Specialist Consultant.US University
7、Research:New global initiative (investigating entryopportunitiesBob Ackerman).- 5 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary and ConfidentialPerformance measurement is an important but complex subjectThis documents an initial step in the right direction.Companies see the need for metrics. . . .
8、. but developing the “right” set of metrics is a challenge “If you cant measure, you cant manage, you cant motivate” Establishing the proper measures within an organisation enhances continuous No commonly used “model”. Business issues that warrant performance measurement: Differ between industries.
9、Differ within industry. Change overtime.There is no one “right” answerFocusAccountabilityCommunicationLinking strategy to action Assigning accountabilityto take action when neededMeasuring progress towards goals through interactive communication and education- 6 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Pr
10、oprietary and ConfidentialWe used a generic supply chain framework as a basis for our analysis . . .Supply Chain FrameworkSuppliersPurchasingInformation FlowForecasting & Production PlanningCustomer ServiceInventory ManagementInboundLogisticsManufacturingMaintenanceMarketing &SalesOutboundLogisticsI
11、ntegrated Supply Chain ManagementCustomersThis framework aligns with the CoE POV and is also similar to framework for the supply chain diagnostics inventory database.- 7 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary and Confidential. . . and concluded there are three strategic objectives we should
12、focus on when analysing the supply chainKey metrics must give information on how a company is performing against old strategic objectives.Strategic objectives:QualityTimeCostProducts/services according to customer expectationsOn agreed timeAt reasonable costPurchasingInformation FlowForecasting & Pr
13、oduction PlanningInventory ManagementInboundLogisticsManufacturingMaintenanceMarketing &SalesOutboundLogisticsIntegrated Supply Chain ManagementCustomer ServiceSupply Chain FrameworkNB: BoundariesNPDISupport functionsTailor to company specific (BSC) objectives- 8 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey P
14、roprietary and ConfidentialWe began with a brainstorming session on the key drivers for quality, time and costThe complete picture can be found in the appendix.We looked at the supply chain from the customers perspective.We brainstormed on “what could go wrong along the supply chain”: What are drive
15、rs of performance from a quality, time and cost point of view.PriceServiceProduct qualityProduct quantityProduct deliveryLate arrival Late deliveryInventory costProduct costProduc-tion costDelivery costCustomer service costQualityTimeCost- 9 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Proprietary and Confide
16、ntialMaking their client specific warrants attentionRespect all sources of data:Understand their relationshipsthe “causal tree”:Recognised Cross-Industry; In-Industry and In-Company similarities and differences.Blind-sidedIntuitionOpinionDiscussionSurveyFunctional MeasuresKPIsExternal Best PracticeQualitativeQuantitativeObjective 1KPI KPI KPI KPIObjective 2 KPI and xxx measure “Dual service” measures (cost & time) “Hard wired” and tennons Push-pull- 10 -LShop/Ldn/22Oct97Rp-fc/kfMcKinsey Propriet
