Sustainable Solutions for SCM

mentioned three elements: particular performance elements, performance instruments/ tools and performance management process (see Figure 3.5).

Figure 3.5 Guidelines for the PMMS 3.2.1 Guidelines for particular performance elements

Under the heading of guidelines for a single performance element, criteria can be grouped which are aimed to evaluate if one specific performance element is appropriately defined and is able to function correctly. As the single performance element forms the basis for the PMMS, it is necessary to design each performance element adequately. Validity, unambiguity and adequacy This criterion is the basis for every performance element. It means that the performance element must be able to measure the focal activity correctly and thus be independent from external influence. Synonyms can be unambiguity or adequacy. This criterion becomes more important the more abstract the performance element is. For example, the quality of collaboration between supply chain partners is more abstract than the logistics cost and thus it is more important to check the validity for the first. A good example for a valid performance element is the total lead time to measure the delivery flexibility or reactiveness of a supply chain. A negative example of this is to measure the satisfaction of the workforce by the salary they get because satisfaction of the workforce can also be influenced by other factors such as work environment or quality of leadership. But even for seemingly validperformance elementsmistakes in the operationalisation of a performance element can lead to a negative validity. This applies, for example, to the case of delivery reliability when in a just-in-time-environment an order is defined as in time when the order arrives five days earlier or later than expected. Here the indicator will lead to invalid results (even if measured correctly) as it does not accurately reveal unreliable deliveries. In just-in-time-environment deliveries should be measured with an allowed deviation of several minutes. At the same time validity also includes that the indicator should have an adequate level of detail [10]. In the case of the lead time, this means that several steps within this lead time (order processing, replenishment, production and delivery) should be recorded in order to get a better understanding of possible problems.

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