Exam 13: Performance Measurement

Measurement can be used to create alignment. Three areas should be considered: alignment between strategy and measurement, alignment among measures used across functional areas, and alignment of measures employed up and down the supply chain.

To manage the supply chain for competitive advantage, modern measurement systems must provide a broader array of historical information that is better balanced between internally focused and externally oriented measures.

Accurate total costing and activity-based costing create process transparency and make trade-offs to understand.

Fill in the Blank(s) -Productivity relates the outputs generated by an activity to the____________ consumed by the activity and is usually expressed as a ratio; for example, units produced per labor hour.

Customer demands necessitate much better satisfaction information that comes straight from the customer.

The downside of activity based costing is that enables decisions outside of the standard business accounting system.

Explain the difference between activity based costing (ABC) and conventional costing methods. ABC costing requires process transparency and detailed information on products, customers, activities, and resource costs. Conventional costing usually does not provide the true allocated costs to directly related support functions, equipment, facilities, and people. Fill in the Blank(s) (Blank Identified in RED)

Inventory Turnover is equal to cost of goods sold during a time period divided by the average inventory valued cost during the time period.

Customer-centric measures should be tailored to important customers.

Productivity relates the outputs generated by an activity to the resources consumed by the activity and is usually expressed as a ratio; for example, units produced per labor hour.

Fill in the Blank(s) -In sourcing and operations, the most common measure of ___________is defect rate expressed as defective parts per million opportunities.

In his book, The Goal, Eliyu Goldratt pointed out that minimal emphasis on capacity utilization generates excess inventory that can create chaos and confusion, greatly reducing a manager's ability to make good, competitive decisions.

Measurement shapes behavior. Tom Peters suggests, "What gets measured, gets ________."

Scorecards incorporate financial and key qualitative measures to communicate expectations, evaluate performance, and motivate improvement.

Most supply chain measures do capture what is going on across the entire supply chain.

Fill in the Blank(s) -____________can help companies identify and emulate best practice.

Fill in the Blank(s) -A company's ability to monitor and manage its value-added processes as well as those of its SC partners depends on its capability.

A key performance measure for a company's "Operations" function is ________.

A company's ability to monitor and manage its value-added processes as well as those of its supply chain partners depends on its measurement capability.

A perfect order is one that is received, processed, picked, packed, shipped, documented, and delivered on time without damage.