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Performance Measurement

What are you measuring? It is a truism that performance measurement shapes behavior. In functionally based organizations like Coca-Cola, these measurements are based upon departmental budgets and are underpinned by objectives such as cost minimization, asset utilization and efficiency, and productivity improvement. An incentive to agility can be created by linking processes to customer based metrics. On the other hand, time-based metrics will focus on cycle-time reduction, set-up time reduction and other measures that encourage agile practices. The measurement used is Perfect order achievement. How do you measure? Initial Setup: Baseline work activities, timesheets, and performance targets are defined. Monthly actuals: Actual activity time and volume are captured. Efficiency and productivity measures (Unit cost, time per request, per person volume) are calculated. Analyze & Explain: Significant variation & trends are explained after the analysis. Estimate future demand: Estimate, input and auto calculate out month. Adjust resource capacity plan: Compare performance against target and improvement opportunities are identified. Where would the data come from? Coke One R3.0 (ARIS database), Coca-Cola enterprises, Euro monitor, Print measurement Bureau, Coke Business Management Process. How often would you measure? Monthly and capacity demand planning excludes company holidays and weekends. Who would see the measure? Operations Manager (Global and regional), Administrative manager and functional manager What results do you expect to influence within the Supply Chain? Coca-Colas experience in the emerging markets shows the strategic importance of sustainability. A fundamental tenet of agility is customer responsiveness, hence the need to ensure the primary measures of business performance reflect this imperative. Time to market and Time to volume are powerful metrics employed by Coca-Cola. The major challenge is to create strategies and procedures that will enable Coca-Cola to become the supplier of choice and to sustain the top position through higher levels of customer responsiveness. This is the logic that underpins the concept of the agile supply chain.