SCM Champ: A Supply Chain Management Blog

SCM Champ: A Supply Chain Management Blog
Supply Chain Management: Its Not About Technology, Its About Economy

Monday, September 3, 2012

KPI Scorecard

A KPI Scorecard is a specific application of a scorecard which is used to measure progress toward a given set of KPIs and minimize the gap between the KPIs and Benchmarks. It adds value to the organization by connecting KPIs within tactical and operational levels in an organization to the overall strategy of the organization.

Scorecards can be implemented at all levels of an organization including executives, managers and staff and manages the execution of strategic objectives at each level of the organization to ensure a consistent understanding at all levels of the organization’s priorities and value expectations. They are usually updated in periodic snapshots, use graphical symbols and icons to present summaries of organizational performance, and chart overall progress over time for the organization. In addition, the scorecard establishes accountability to appropriate individuals and traverses visibility across the organization from executive management to operational levels. The scorecard can be a powerful tool to allow for assignment of goals and objectives to all individuals and focuses accountability on the relevant individuals and business units. Typically scorecards provide internal and industry benchmarks, goals, and targets that assist an individual’s understanding of their own unique contribution to the organization. Often, the scorecard spans strategic, tactical, and operational aspects and decisions of the organization and supports the specific demands of varying levels of management.
Benefits and Advantages of KPI Scorecards to an organization include:
  1. Scorecards drive improved organizational performance
  2. Scorecards translate strategy into concrete terms and help track its execution
  3. Scorecards help ensure that the right measures are utilized
  4. Scorecards encourage the right balance of operational and strategic factors
  5. Scorecards encourage good management
  6. Scorecards present a compelling picture of performance that is not distorted an individual issue
 A Typical KPI scorecard looks as below:

Supply Chain Operations Reference model (SCOR) Model

Supply Chain Operations Reference model (SCOR) model was first propounded by Supply Chain Council (SCC) in 1996. The Supply Chain Council now has closer to 1,000 corporate members worldwide and has established international chapters in North America, Europe, Greater China, Japan, Australia/New Zealand, South East Asia, Brazil and Southern Africa. Supply Chain Council's membership consists primarily of practitioners representing a broad cross section of industries, including manufacturers, services, distributors, and retailers.

The SCC's objective of introducing SCOR model was to assist its members to understand their supply chains, supply chain configurations, associated processes, activities, practices, workforce assets and improve their supply chain performance. SCOR model rests on four pillars:

  1. Performance; Metrics help to describe the performance of the supply chain
  2. Processes help explain how the supply chain is configured (what activities are taking place)
  3. Practices are unique ways to configure supply chain processes
  4. People; Assess needs, availability and gaps of skills in the supply chain workforce
 Each section consists of elements that have hierarchical relationships and have relationships with elements of the other sections. For example: Metrics are linked to processes, practices are linked to processes, skills are linked to processes. These relationships support the diagnostic analysis and root causing of performance gaps. SCOR is not only a process reference model, it is also a continuous process improvement methodology. The only drawback of SCOR is that it does not address sales and marketing (demand generation), product development, research and development, and some elements of post-delivery customer support.

Download SCOR quick reference guide