In our previous post in this series, we talked about the ingredients needed to create a fact-based culture among your internal supply chain teams and your external constituents (suppliers). Today we’re giving you the goods – sample metrics for your Quality Dashboards and Supplier Scorecards.
There are three critical performance drivers in the supply chain – Cost, Quality, and Time – all of which must be objectively managed. Some lend themselves to quantifiable metrics while others are more qualitative. In either case, supplier quality teams need a dashboard and scorecard(s) that makes all required information accessible and easy to consume. Let’s talk a bit more about cost metrics.
As much as 60% of the cost of production is purchased material content and 67% of the cost of poor quality is in the non-materials cost. With the proportionately large amount of money being spent on business processes that support production, both the cost of parts and processes must be managed with metrics such as:
Last time, we presented the challenges that quality managers face when trying to measure supplier performance. Today, we’re outlining how to create a supply chain culture based on facts.
Removing “supply chain” from the equation, how can any company expect to make decisions without the right data? arcplan’s view of business intelligence is that everyone should have access to the data they need to make performance-driving decisions. Without access to this type of data, decisions are often made using anecdotal evidence or data from individual locations, and not based on an aggregate view of quality.
If a fact-based culture is to be established between your internal teams and external suppliers, you need 3 ingredients: