This article wraps up our series on supply chain quality management. Thanks for sticking with us while we explored the need for measuring supplier performance, how to implement a system to track it, and sample metrics to start the process. Today, we’re presenting a success story from our client, Graham Packaging.
Pennsylvania-based Graham Packaging Company manufactures more than 20 billion blow-molded containers annually from 81 plants in 16 countries, generating more than $2 billion in annual sales. The company uses hundreds of vendors in order to support its distributed production facilities and foster competition among vendors. However, in order to maintain high quality standards, Graham Packaging needed a consistent way for the plant managers and the Global Supplier Quality team to collectively drive performance.
The company’s Supplier Quality team worked closely with IT to implement an arcplan-powered Supplier Quality Dashboard and Scorecard that saved millions and vastly improved supplier performance.
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:
The Case for Supply Chain Quality Management: Part 2 – The Challenges to Measuring Supplier Performanceby Kathleen Rohrecker
Last time, we discussed the benefits of measuring supplier performance and established that the practice is crucial to an organization’s bottom line. Today, we’re discussing the challenges to measuring supplier performance.
Industry experts suggest that only half of supply chain quality managers effectively measure their suppliers. In speaking with our clients, we’ve uncovered the following challenges that stand in the way of effective measurement of supplier performance:
- There is a lack of actionable information. Many companies do not have an intuitive way to access information in ERP or other databases and present them in one dashboard or scorecard with the ability to drill down to the supplier or even PO level. Problems are often compounded when key data reside in more than one data source.
- Data are not timely. Many companies rely on spreadsheets to collect quality data from plants, which cause inconsistencies and delays.
- Reporting is inconclusive. Without a way to aggregate quality and supplier performance information, it is impossible for management to monitor trends and compare leading performers to lowest performers.
- Data are neither conclusive nor complete. Supply chain quality managers rely on word of mouth from plant managers and on-site quality engineers to assess performance.
- Qualitative information is not captured. Many reporting systems do not provide for the qualitative information that is so important to supplier quality management. Information about site visits, best practices, action plans, etc. must be a part of the overall Supplier Performance Management application.
Are you experiencing these or other challenges in trying to measure your supplier performance? If so, we’d love to hear from you in the comments. Next time, we’ll outline how to establish a fact-based culture within your supplier quality team.