Sustainable Solutions for SCM

3.2.3 Guidelines for performance management processes Finally, guidelines for the alignment with the PMMS’s environment have to be discussed. This set of guidelines focuses on the PMMS’s ability to work properly in the organisational framework that it belongs to and on its ability to generate impact. These guidelines are therefore focusing to a great extent on the performance management process. Consistency with goals, business strategy and incentive system The first and most obvious guideline is that the PMMS should be aligned with overall goals and match with the business strategy of the focal unit [3], [41] because different businesses with different strategies require different pieces of information for decision-making and performance measurement. This is especially relevant for supply chain management. When for example a business strategy in a fashion business relies heavily on time in the sense that new collections can be delivered fast to the outlets and be flexibly replenished by production based on what customers bought, the performance measurement system should contain different and consistent aspects of time. Those aspects also have to be broken down to the relevant segments of the supply chain: when regarding the SCOR (Supply Chain Operations Reference) model activities in a supply chain can be divided into the four main physical processes: source, make, deliver and return. Each of the processes has specific goals and in some companies different processes might also be carried out by different companies. Therefore, it is important to define the indicators so that the overall time-based strategy and the goal of the supply chain as a whole can be reached and the indicators are distributed consistently to the different process types. Good PMMS should also be consistent with the management reward system [39]. This also includes incentives for a successful implementation, which is a major goal of PMMS. As discussed in the section on performance management systems, this guideline is the heart of many contributions. It means that the main KPIs or goals should be the basis for a reward of the relevant managers. An impact on the manager’s wallet is often one of the main and strongest incentives for action. Reliability of measurement process and acceptance by users Within this guideline literature requests that data collection and methods of calculating the performance criterion must be clearly defined [3]. Besides these aspects this guideline should be seen in a wider context and should focus on several aspects: • Firstly, the definition of the performance elements should be according to the mentioned guidelines for single performance elements valid and robust. • Secondly, the recording of the data should be clearly defined. This relates on the one hand to the gathering of quantitative data from IT-systems which have to be extracted consistently by a standardised extraction procedure and on the other hand to the gathering of “soft” information such as the degree of compliance with process standards. Here it is very important to define the way the pieces of information are gathered and, if several individuals are involved, that those individuals are consistently trained.

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