SourcingApps Performance Analyis

 for Supplier Performance Index

for Throughput

 for Value Indices

 for Total Supplier Productivity

for Performance Calculators

for Assessments Relationship, Organizational, Team

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.
 

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.

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.

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

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.

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.

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