Supply Chain Performance Measurement and Organizational Alignment in an Uncertain World

Abstract

In an extremely volatile environment, traditional performance measurement approaches have proven ineffective. To prepare for disruptions, companies historically have utilized scenario planning capabilities to build redundancy, flexibility, and develop early detection capabilities. In this chapter, the authors provide guidance on selecting the right ‘causal linkages' between supply chain objectives and performance measures, relevant to the scenarios being evaluated. The authors describe how organizations can leverage the maturity model approach in conjunction with foundational concepts of perspective-based performance evaluation models, like the balanced scorecard (BSC), to define a comprehensive performance measurement framework. The authors propose using maturity models – which by design provide a roadmap to the next level of performance – as a structured way of identifying any supply chain's current capability or maturity level. A holistic framework for operational metric alignment and KPI governance, based on perspective-based modeling design principles is presented.