SourcingApps Performance Analyis
for
Supplier Performance Index
for
Throughput
for
Value Indices
for
Total Supplier Productivity
for
Performance Calculators
for Assessments
Relationship,
Organizational,
Team
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SourcingApps
Supplier Performance Index
The Supplier performance Index (SPI) establishes a uniform business wide
supplier rating system where past supplier performance on quality and delivery
are captured and quantified using an index technique. The SPI can be a
multiplier or bid factor and used to award future business based upon past
performance (amount of non-productive costs accumulated by a supplier).
A statistical normalizing method is incorporated into the SPI formula to
correct for the basis of large dollar suppliers. The concept is all waste
is bad, $500 of non-productive costs are undesireable whether they
come from a supplier delivering in lots $100,000 or $10,000 or $1,000.
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SourcingApps
Throughput Analysis
Find the hidden factory by "Measuring System Performance" versus
"Work Station Efficiency."
Throughput analysis measures the throughput effectiveness of a value-added
conversion process or factory. It does this by measuring; the amount of time
that the process is not available to perform the value-added conversion;
the cycle time performance (actual versus theoretical) and; quality performance
(number of good units to total units produced). After the data is captured
the three factors are multiplied together to quantify the throughput
effectiveness of a process or factory. The throughput effectiveness can be
translated into loss earnings because: if the process wasn't available 100%
of the scheduled time; the actual cycle did not equal the theoretical cycle
time and; if all the parts produced were not good parts then the process
would not be producing the maximum number of units it was capable of producing.
Since it is not producing the maximum number of units, revenue is lost. A
world-class process or factory availability and cycle time performance is
95%+. World-class quality exceeds 99% acceptable units. One way a supplier
can increase their revenue is to increase their overall effectiveness versus
increasing their prices. This analysis calculates the impact of increases
in these measures of effectiveness. |
SourcingApps
Value Indices
Value indices measure the direction and rate of value improvement
generated by a supplier. Value can be measured three ways: price only
(for highly competitive commodities); price and quality (when total cost
is important, especially in long term agreement in the absences of
market forces) and; price, quality and cycle time for strategic
suppliers (particularly for items that are sole sourced).
In the global competitive environment "end customers" are demanding every
increasing value. Therefore, the supply chain must continue to provide
value upstream in the supply chain. |
SourcingApps
Total Supplier Productivity
How is a a supplier's total price and value (quality, delivery, technical)
contribution determined?
Total supplier productivity captures the value in quantitative terms or all
contributions from a supplier. Contributions may be in the form of lower
prices, improved processing characteristics, greater yields, improved
quality, improved delivery, design support, and cost improvement
suggestions. |
SourcingApps
Performance Calculators.
Supply managers are reporting their
accomplishments in traditional business measurements rather supply
management terms. By doing this supply management's contributions to the
success of the enterprise are directly comparable with the other business
functions. Scenario #1
Sourcing Savings in EPS (Earnings Per Share): Sourcing savings in Terms of
EPS = Cost Savings/Number of Shares
Scenario #2 Sourcing Savings in Terms of ROI Invest Capital: Sourcing
Savings in Terms of ROI = Savings/Invested Capital X 100
Scenario #3 Sourcing Savings in Terms of Increased Sales Needed to Generate
the same dollars of Operating Profit
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SourcingApps
Relationship Assessment
Relationships are about behavior. If you are interested in knowing the type
of relationship you have with an organization or person you need to observe
the behavior of your counterpart towards you. So this assessment asks you
to make judgments about the type of behavior that is present in the relationship.
The relationship assessment assists in defining the current type of relationship
that exists between a buyer and seller. It also can be used to define what
the relationship needs to be. To enhance the value of this assessment it
is recommended that both parties assess the relationship from their point
of view.
Antagonistic Relating:
Buyers and sellers are enemies. Both parties contrive methods to deny any
needs satisfaction to the other party. Neither party takes responsibility
for anything that happens in the relationship. The underlying dynamic is
rejection.
Adversary Relating:
Buyers and sellers are engaged in competitive struggle. Both parties are
attempting to capture the maximum value for their side. They conditionally
accept each other as long as they believe they have the opportunity to gain
more then their counterpart.
Cooperative Relating:
Buyers and sellers relate as team. Mutual problem solving is achieved through
communication of problems, needs, and feelings. They accept each other
unconditionally (within boundaries; i.e., lying, cheating, stealing). Mistakes
are tolerated and expected because human beings are imperfect.
Creative Relating:
In creative relating one party in the relationship is focusing their energy
in assisting the other party to exceed the goals and objectives. This is
a special relationship and is not normal in business relationships. The only
exception would be government set-aside programs or a countertrade obligation
where the objective is to find a supplier that is capable of supplying and
the task is to assist them in reaching this goal.
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SourcingApps
Organizational Assessment
The organizational assessment measures the rigidity of an organization. It
does this by requiring you to determine where you observe the organization
along a continuum anchored on rigidity on one end and flexibility on the
other.
Rigid organizations' tend to behave as closed systems i.e., they know
that they know and reject new or different concepts.
Flexible organizations' tend to behave as open systems i.e., they
don't know how much they know and are therefore open to new or different
concepts. This assessment always rewards more flexible behavior. It has been
proven that as flexibility increases productivity increases, to a point.
After a certain point productivity decreases as flexibility increases because
the organization become nonfunctional as it attempts to be all things to
all people. Therefore, one could say that this assessment has a bias (it
always favors behaviors that characterize open system behavior). However,
SDS feels that there is little risk in organizations being too flexible.
Borderline organizations are difficult to work with because they may
exhibit one type of behavior consistently and then without warning change
for no apparent reasons. To enhance the value of this assessment it is
recommended that both parties assess their counterpart. |
SourcingApps
Team Assessment
This assessment was developed to assist teams in defining what type of team
they are or have become. Teams go through many phases. This team assessment
provides a means of guaging whether a team is:
A Pseudo Team or Dysfunctinal Team (if long standing)
An Effective Team
A High Performance Team |