Measuring performance across the entire supply chain can be a complex process. After all there is only so much that your organization can directly control in a supply chain.
So should you concern yourself with the factors outside of your control? Doesn’t it just make the task of benchmarking, target setting and performance measurement more complex while making a mockery of adages like “You can’t improve what you don’t measure”?
Surely, for example, the knowledge that a supermarket chain is merchandising your products ineffectively doesn’t help you to improve your performance as a supplier. So what would be the point of measuring the supermarket’s performance, when you have no control over their merchandising strategies and tactics? In this case, you can measure it, but you can’t improve it, right?
Collaboration: As Important as Control in a Supply Chain
Wrong … Of course you can’t march off to the supermarket headquarters and demand that they improve their marketing strategy for your products. You won’t be doing your company any favors if you threaten to stop supplying them if they don’t shape up.
What you can do though, is reach out in an effort to collaborate with the supermarket chain and help them to improve their marketing effectiveness. By working with your customer in a way that benefits them, their product consumers and your own business, you can improve overall supply chain performance and increase turnover and margins.
So yes, it does pay to measure factors that are outside of your direct control in the supply chain. Supply chain management is a deeply collaborative process that involves numerous value-adding partners. While your company cannot control the behaviour of suppliers, partners or customers, you can influence it in a way that benefits all concerned.
So what’s the takeaway here? … It’s simply this: When benchmarking and measuring supply chain performance, it pays to focus on inter-enterprise measurements as well as those within the direct control of your organization.
When you measure across enterprises, you can pave the way for integration and collaboration, streamlining the entire value chain and gaining efficiencies and savings to benefit all parties involved—including the most important party of all; the end customer or consumer.