Supply Chain

Management
 Project Ten
Supply Chain
Performance
Evaluation and
Incentives
Lecturer: Li Zhe
 learning target

Professional ability
social competencemethod ability
 Understand  According to  Accurate
supply the and timely
chain professional discovery,
performanc standards of collection,
e logistics sorting and
evaluation engineers analysis of
and and supply problems
establish chain and put
its index managers forward
system  Communicat reasonable
 Enterprise e and plan. solutions
Su
pp Task decomposition
ly
Pe task one Supply chain performance evaluation and content
Supply Chain
rf Performance Construction of Performance Evaluation Index of
or Evaluation
Supply Chain
m
an Supply Chain Incentives and Their Content
task two
ce Supply Chain Incentive Model
Ev Supply Chain Incentives
al task three Benchmarking Concept
ua Benchmarking Benchmarking implementation process
ti
Overview of Benchmarking
on
task four
an Benchmarking Benchmarking implementation process
d
practice one Knowledge of performance appraisal methods
In Construction of Supply Chain Performance Evaluation
ce Practice two
System
n
 think

How to evaluate a student?

How to evaluate a teacher?
How to evaluate a company?
 Task 1 Supply Chain
Performance Evaluation

one Supply chain

performance
evaluation and
content

Construction of supply two

chain performance
evaluation indicators
 performance evaluation and
content

1 of Supply Chain Performance Evaluation

Overview

2 Indicators of Supply Chain Performan

Contents and
 performance evaluation and
its characteristics
Current performance indicators focus on a single
enterprise, targeting departments or individual
 Characteristics of evaluation index design:
employees
1 . The performance evaluation index
data comes from financial results,
which are slightly behind in time and
2 . It mainly
cannot reflectevaluates theoperation
the dynamic
completion
of of chain.
the supply the work of the
functional departments of the
enterprise, and cannot evaluate the
3 . It focuses
business on post-event
process, lacking
analysis, lacks
scientificity real-time
and objectivity
performance, and makes it difficult
to make up for the damage and losses
 the current
performance evaluation
supplier
indicators
manufa
cture
Distrib custom
utor er
pric r
cost stock level
e
efficiencyinventory turnaround time
Yield warehouse area

current function -based performance evaluation indicators

 supply chain
performance evaluation
manufa
supplie Distribu custom
cture
r
cycle period tor er
r
cycle period cycle period
On time
Delivery order
delivery
reliability completion
product
product quality
quality
am of performance evaluation indicators based on supply chain
 1.1.2 Principles of Supply
Chain Performance Evaluation

 ( 1 ) Focus on analyzing key performance indicators.

 ( 2 ) Adopt the supply chain performance indicator

system that can reflect the business process.

 ( 3 ) Reflects the entire supply chain and operations, not

individual departments.

 ( 4 ) Real-time analysis and evaluation as much as

possible.

 ( 5 ) Expand the evaluation object to supply chain related

 1.1.3 The role of supply
chain performance evaluation
 ( 1 ) It is used to evaluate the operation effect of the
entire supply chain.

 ( 2 ) It is used to evaluate each member enterprise in

the supply chain.

 ( 3 ) It is used to evaluate the cooperative

relationship between enterprises in the supply chain.

 ( 4 ) In addition to the evaluation of the operation

performance of supply chain enterprises , these
indicators can also play an incentive role for
 1.2.1 Contents of Supply
Chain Performance Evaluation
 Contents of evaluation indicators:

1 . Tangible external performance

(tools, equipment, personnel, marketing
... )
2 . Intangible Performance: Reliability,
Responsiveness, Capability, Service
Attitude, Trustworthiness, Safety,
Approachability, Communication Ability,
Ability to Understand Customers
 1.2.1 Indicators of Supply
Chain Performance Evaluatio
• (1) Internal performance quality
• (2) External performance (user
satisfaction, best implementation
benchmarks)
• (3) Indicators of production and
demand rate (customers, time, cost,
assets)
• (4) Production cycle indicators or
beat indicators of supply chain
products
• (5) Indicators of total operation cost
of supply chain
 chain performance
evaluation indicators

1
mance evaluation index of the whole business process

2
ation indicators of upstream and downstream node ent
of the overall business process of the
supply chain
Sales ratio: What is the
sales ratio?
The number of products sold in a
Sales ratio
certain period of time ( S )
=
The number of products produced in a certain
period of time ( P )
Since S ≤ P , the sales-to-production ratio is
1.
of the overall business process of the
supply chain
The sales rate can be
① further
.Production and sales
subdivided into rate of supply chain
nodethree
enterprises = of products sold by the node
The categories:
number
enterprise within a certain period of time ( S
)
② .Production and sales ratio of core
node enterprise in a certain period of time
enterprises in the supply chain =
( P )

The number of products sold by the core

③ .Supply chain production and sales ratio =
enterprise within a certain period of time ( S
)
core firm within a certain period of time
( P )
of the overall business process of the
supply chain
Σ|P i -S i |
Average absolute
n
deviation of
production and
nsales
= the
= number of supply chain node
enterprises; P i = the number of products
produced by the i -th node enterprise within a
certain period of time; S i = the number of
products sold by the i -th node enterprise
within a certain period of time.

The larger the value, the more inventory and the

of the overall business process of the
supply chain
Supply chain product
production cycle

① . Supply chain node enterprise (or retailer) parts

production cycle.

② . Product production cycle period of core

enterprises in the supply chain.
of the overall business process of the
supply chain
Supply Chain Total
Operating Cost Indicator
① . Supply
communication costs.
② . The total inventory
cost of the supply
chain.
③ .The total cost of external
transportation of each node
enterprise.
of the overall business process of the
supply chain

Product cost indicators of the

total core enterprise of the
supply chain
Total Product Quality Index of
Supply Chain
2.2 Performance evaluation indicators of upstream
and downstream node enterprises in the supply chain

Schematic diagram of the supply

chain hierarchy model
 Task 2 Supply Chain
Incentive Mechanism

one Supply Chain

Incentives and Their
Content

two
Supply Chain Incentive
Model
 1. Supply chain incentives
and their content

1 Incentive subject and object

2 motivational goals

1 Incentives
 2.1.1 Incentive
subject and object
Supply chain incentives are an important task of supply
chain management.
The object includes groups (supply chain and enterprise)
and (managers and general employees) and expands the
research scope to individual psychology and group
psychology.

Incentive subject and object mainly involve the

following pairs:
 1. Incentives from core companies to member companies
 2. Incentives from manufacturers (downstream
companies) to suppliers (upstream companies)
 3. Incentives from manufacturers (upstream companies)
to sellers (downstream companies)
 2.1.2 Incentive
goals

The goal of the incentive mechanism

Through certain incentive means, mobilize
enthusiasm, take into account the interests of
both parties, eliminate the risk of information
asymmetry, make the supply chain operate more
smoothly, and achieve the goal of win-win
supply chain.
 2.1.3 Incentives

1. Positive incentives
Positive reinforcement and encouragement.
4 types: material incentives, spiritual
incentives, emotional incentives, and
information incentives.

2. Negative incentives
Negative reinforcement, restraint and
punishment.
 2.2 Incentive
mode
 1. Price Incentives
 2. Order Incentive
 3. Goodwill Incentive
 4. Information incentives
 5. Eliminate incentives
 6. Joint development of new
products / new technologies
 7. Organizational Incentives
 Task three
benchmarking

one Benchmarking
Overview

Benchmarking two
implementation process
 An overview of
benchmarking
1 Types of Benchmarking

2 Benefits of Benchmarking

3 for Successful Benchmarking Impleme

Key Factors

4 Information and data sources

 3.1 Overview of
benchmarking
• The benchmarking method is a business
analysis method established by Xerox
Corporation in the United States to
quantitatively analyze and compare
the current situation of its own
company with that of other companies.

• Benchmarking is to take those

outstanding companies as the
benchmark for companies, take them as
the object of learning , catch up,
 Frank Xerox _
In 1959 , Xerox introduced the world's first white paper copier.
From the 1960s to the mid- 1970s , the company experienced a
period of rapid growth.
The Japanese entered this market for the first time in 1976.
Before the 1980s , Xerox's profit lead began to shrink . Later,
Canon, NEC and other companies sold
products at Xerox's cost price and
were able to make profits. The product
development cycle and developers were
shorter than Xerox. At least 50% ,
Xerox's market share plummeted from
82% to 35% .
 Reform
results
• Through all-round centralized analysis
and comparison, Xerox clarified the
operation mechanism of its competitors,
found out the gap with major rivals such
as Canon, comprehensively adjusted
business strategies and tactics, and
improved business processes. regained
its market share.
• In improving the work level of
delivering orders and dealing with the
problem of large waste of low-value
goods, the benchmarking method is also
applied, taking Bean Company, whose
 3.1.1 Types of
benchmarking
• Strategic Benchmarking: Comparing the market
strategies of enterprises, such as:
competitors' market strategies, resources,
advantages

• Operational Benchmarking: Use a variety of

methods to achieve good results in all aspects
of each function, and generally choose the
aspects that have the greatest impact

• Support Activity Benchmarking: Support

 implementing
benchmarking
• Help companies identify the best companies
and the best management functions to
improve work performance .
• Overcome the stubborn disease of
enterprise progress, find out the deep-
seated contradictions , and maintain the
sustainable development of the
enterprise .
• Get market information .
• Make the various departments of the
3.1.3 Key factors for successful
implementation of benchmarking
• people and departments
• data
• competitor
• market
• Understanding the role of
benchmarking
 3.1.4 Information and
data sources
• business journal
• library
• supplier
• Professional consulting agency
• expert
• the Internet
process of
benchmarking
 Project
evaluation

self- Summ extracu

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Evalua improv expand
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