2012 Annual Conference Presentation Supply Chain Risk andPerformance Monitoring: The use of automated systems tohelp you m...
Which sector are you in?                      Pick one!1. Municipal2. Academic                                       31   ...
How many Canadian employees work for your        organization? Pick only one!1.   1 to 9                                  ...
Other than OIPMAC which    Organization(s) do you belong to?                 Pick as many as you would like!1. OPBA       ...
Survey Says!OPBA = Ontario Public Buyers AssociationCPPC = Canadian Public Procurement CouncilNIGP = National Institute of...
How many competitive bids did your      group issue in 2011?                        201.   1 to 492.   50 to 993.   100 to...
How many competitive bids did the Town of Oakville issue in 2011?            180
On average how many vendor performance      evaluations do you do per year?                    Pick only one!             ...
Survey Says!
Which tools or methods do you use?                Pick as many as you would like!                                         ...
Which tools or methods do you use?
What triggers an evaluation?1.    Periodic                                   19                                        182...
Survey Says!
Why Measure Performance?               •     Support better decision making               •     Support better communicati...
Problems with Purchasing and Supply     Chain Measurement and Evaluation              •     Too much data              •  ...
Performance Measurement        • Effectiveness           – Extent to which, by choosing a certain course of             ac...
Metrics Key               •     SPECIFIC               •     MEASURABLE               •     ATTAINABLE               •    ...
Develop Specific Measures        • Objectivity                                  • Directly related to        • Clarity    ...
Measurement System Characteristics• Effective measurement requires consistent and reliable  data• Periodic review of measu...
Measurement System Characteristics        • Measurement is not free        • Not all aspects of performance lend themselve...
Measurement and Reporting Frequency        • Reporting frequency to buyer           – Day-to-day performance for troublesh...
Uses of Measurement Data        • Identify poor performing suppliers        • Support supply base optimization and rationa...
Supplier Performance Management        • How does buyer know how well any given supplier is          performing?        • ...
Working with Contractors  WHAT IS THE PURPOSE OF A CONTRACTOR PERFORMANCE    EVALUATION?  • To ensure that contracts stay ...
Steps to Good Performance Management        • Establish and implement procedures for          review of performance proble...
Documenting Performance        • The MOST crucial part of performance management        • Weekly site meetings – up date t...
Documenting Performance        • Any performance issues MUST be discussed with the          contractor        • Contractor...
Types of Documentation        • Contract Check List                – Details deliverables and project milestones        • ...
Types of Documentation        • Summary Evaluation Report                – This is the contractors formal evaluation.     ...
Contract Management        • Be flexible        • Exercise sound judgement                Contracts are not held together ...
Examples of Automated Systems               RAQS               TQRDC                VPM
On a scale from 1 to 5 what is the average     score you give to your contractors when you                    do evaluatio...
Central tendency State of Florida                             Overall Rating70%                                 66%       ...
Ministry of Transportation OntarioMTO uses the Registry, Appraisal & QualificationSystem (RAQS) to manage vendor qualifica...
RAQS Key Functional Areas– Vendor management   • Vendor registration & qualification   • Vendor performance assessment   •...
Simplified 3M team rating (TQRDC)       T – Technology       Q – Quality       R – Responsiveness       D – Delivery      ...
Courtesy: Jeff van GeelManager Sourcing & Accounts Payable
Simplified Scorecard        1. Focus on improvement        2. Present facets of performance without           aggregation....
All information for exercise onlyCourtesy: Jeff van GeelManager Sourcing & Accounts Payable
1. Construction – Commodity - Contract2. Contractor - Consultant3. Consistency - Customizable4. Crowdsourcing – Collaborat...
ABC Contracting   Grand River   Ford’s                  Excavation    Landscaping
• For ratings                                          that are                                          “Below           ...
Easy colourcoding tospot whatneeds to bereviewedquickly.Data can beexported forfurthercalculations/analysis ifrequired.
1.   Effective communication     throughout engagement                25%2.   Quality of resources3.   Availability of res...
Survey Says
What are your greatest challenges to        having an effective VPM!        30                         Pick more than one!...
Do you share performance results with contractors - consultants?                        271. Yes2. No                     ...
Do you tie performance management data to proposal evaluations and selection?                       231. Yes2. No         ...
52
Gerald Ford CSCMP               Leopold Koff CSCMPgrford@csolutions.org    226-474-1169               lkoff@conestogac.on....
Visual performance Management Oct 20 OIPMAC
Visual performance Management Oct 20 OIPMAC
Visual performance Management Oct 20 OIPMAC
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Visual performance Management Oct 20 OIPMAC

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Presentation at the Ontario Institute of PMAC conference in Niagara Falls. Co-presented with Leopold Koff (Conestoga College). Material also supplied by Kim Dooling (Town of Oakville). Presentation brought to you by QCsolver.ca

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Visual performance Management Oct 20 OIPMAC

  1. 1. 2012 Annual Conference Presentation Supply Chain Risk andPerformance Monitoring: The use of automated systems tohelp you manage key areas of your organization
  2. 2. Which sector are you in? Pick one!1. Municipal2. Academic 31 (University/College)3. School Board4. Health Care5. Broader Public Sector6. Private 37. Federal/Provincial 2 0 0 1 1 1 2 3 4 5 6 7
  3. 3. How many Canadian employees work for your organization? Pick only one!1. 1 to 9 122. 10 to 243. 25 to 99 84. 100 to 249 75. 250 to 4996. 500 to 999 4 3 37. 1000 to 2499 28. 2500 + 0 1 2 3 4 5 6 7 8
  4. 4. Other than OIPMAC which Organization(s) do you belong to? Pick as many as you would like!1. OPBA 242. CPPC3. NIGP4. OECM5. CMC6. HSCN 87. Construction Association 58. ISM 49. Other 0 0 0 0 0 110. None 1 2 3 4 5 6 7 8 9 10
  5. 5. Survey Says!OPBA = Ontario Public Buyers AssociationCPPC = Canadian Public Procurement CouncilNIGP = National Institute of Governmental PurchasingOECM = Ontario Educational Collaborative MarketplaceCMC = Canadian Association of Management ConsultantsHSCN= Healthcare Supply Chain Network
  6. 6. How many competitive bids did your group issue in 2011? 201. 1 to 492. 50 to 993. 100 to 149 94. 150 to 1995. Greater than 200 1 0 0 1 2 3 4 5
  7. 7. How many competitive bids did the Town of Oakville issue in 2011? 180
  8. 8. On average how many vendor performance evaluations do you do per year? Pick only one! 221. None2. 1 to 103. 11 to 25 64. 26 to 49 3 3 25. 50+ 1 2 3 4 5
  9. 9. Survey Says!
  10. 10. Which tools or methods do you use? Pick as many as you would like! 231. Checklists 202. Forms 17 173. Templates4. User Guides & Manuals 115. Progress meetings 76. Performance 6 documentation7. 3rd Party verification 1 2 3 4 5 6 7
  11. 11. Which tools or methods do you use?
  12. 12. What triggers an evaluation?1. Periodic 19 182. Budget Threshold3. Contract performance 154. Project profile 135. New vendor6. Project complexity7. Client Dissatisfaction 6 68. Repeat vendors 59. Length of Engagement 3 3 210. Every Project 1 2 3 4 5 6 7 8 9 10
  13. 13. Survey Says!
  14. 14. Why Measure Performance? • Support better decision making • Support better communication • Provide performance feedback • Motivate and direct behaviorLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 15Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  15. 15. Problems with Purchasing and Supply Chain Measurement and Evaluation • Too much data • Wrong data • Measurements that are short-term focused • Lack of detail • Drive the wrong performance • Measures behavior vs. accomplishmentsLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 16Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  16. 16. Performance Measurement • Effectiveness – Extent to which, by choosing a certain course of action, management can meet a previously established goal or standard • Efficiency – Relationship between planned and actual sacrifices made to realize a previously agreed- upon goalLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 17Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  17. 17. Metrics Key • SPECIFIC • MEASURABLE • ATTAINABLE • RESULTS ORIENTED • TIME-BASEDLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 18Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  18. 18. Develop Specific Measures • Objectivity • Directly related to • Clarity organizational • Use of accurate and objectives available data • Joint participation • Creativity • Dynamic over time • Non-manipulativeLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 19Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  19. 19. Measurement System Characteristics• Effective measurement requires consistent and reliable data• Periodic review of measurement system to … – Eliminate unimportant or unnecessary measurements – Add new criteria as required – Reevaluate objectives or targets – Objective versus Subjective criteriaLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 20Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  20. 20. Measurement System Characteristics • Measurement is not free • Not all aspects of performance lend themselves to quantitative measurement • Purchasing and supply management is better served by a few precisely defined and thoroughly understood measurementsLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 21Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  21. 21. Measurement and Reporting Frequency • Reporting frequency to buyer – Day-to-day performance for troubleshooting and expediting • Reporting frequency to supplier – Routinely summarized monthly or quarterly – Annual face-to-face meeting • Never delay reporting supplier’s poor performanceLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 22Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  22. 22. Uses of Measurement Data • Identify poor performing suppliers • Support supply base optimization and rationalization efforts • Determine future purchase volume allocations • Identify performance improvement opportunities • Make sourcing decisionsLeopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 23Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  23. 23. Supplier Performance Management • How does buyer know how well any given supplier is performing? • Consists of methods and systems to collect and provide information to measure, rate, or rank ongoing supplier performance • Acts as supplier “report card”Leopold Koff, B.A., B.Ed., CPSM, CPM, CSCMP 24Professor, Supply Chain & Operations ManagementSchool of Business & Hospitality
  24. 24. Working with Contractors WHAT IS THE PURPOSE OF A CONTRACTOR PERFORMANCE EVALUATION? • To ensure that contracts stay on track • To deal with issues and problems as they arise • To develop a relationship with contractors and an understanding of what is expected • To document poor performance to alleviate the never ending cycleKim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  25. 25. Steps to Good Performance Management • Establish and implement procedures for review of performance problems and/or disputes • Have a consistent ranking system and procedure – follow it! • Conduct regular inspections-project managers • Have written report, minutes, notificationsKim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  26. 26. Documenting Performance • The MOST crucial part of performance management • Weekly site meetings – up date the contractor on upcoming issues or problems that have occurred. Get feedback from the contractor on how he feels the contract is going – take his suggestions to heart. • Distribute site meeting minutes as soon after the meeting as possible • Ask the contractor to note any exception to the minutes in an email or memo.Kim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  27. 27. Documenting Performance • Any performance issues MUST be discussed with the contractor • Contractor give reasonable time to correct the issue • DOCUMENT all issues – copy contractor on all documentation • Suggestion: Two part report form – initialed by contractor • Never put yourself in a position where the contractor can say, “I had no idea!”Kim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  28. 28. Types of Documentation • Contract Check List – Details deliverables and project milestones • Observation Record – Document observations of Contractor Performance • Complaint Record – To document and follow up on complaints • Discrepancy Record – To note contract discrepancy, copy to contractor with expected actions. • Field Diary – Used to keep track of daily records – be careful what you write.Kim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  29. 29. Types of Documentation • Summary Evaluation Report – This is the contractors formal evaluation. – Conducted annually and/or upon completion – Reports can be done more frequently for probationary or problem contractors – All notes and documentations are attached – Meet with contractor to discuss final outcomeKim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  30. 30. Contract Management • Be flexible • Exercise sound judgement Contracts are not held together by forms, surveys, diaries or other monitoring tools – but by the contract team! Effective contractor monitoring depends more on the skills of the MONITORS than the monitoring methods • A delicate balance of time and money vs the potential for disruption a service delivery.Kim Dooling, CPPBManager, Purchasing and Risk ManagementFinancial Planning
  31. 31. Examples of Automated Systems RAQS TQRDC VPM
  32. 32. On a scale from 1 to 5 what is the average score you give to your contractors when you do evaluations? 171. Poor 122. Acceptable3. Standard4. Good 3 25. Excellent 0 1 2 3 4 5
  33. 33. Central tendency State of Florida Overall Rating70% 66% 5105 Surveys conducted in April 201060%50%40% 31% Overall Rating30%20%10% 3%0% >= 1.00 to <= 2.80 >= 2.81 to <= 3.20 >= 3.21 to <= 5.00
  34. 34. Ministry of Transportation OntarioMTO uses the Registry, Appraisal & QualificationSystem (RAQS) to manage vendor qualification andvendor performance for infrastructure procurementRAQS is an integrated solution with support for: • MTO user roles • Process workflows • Internal system interaction • Internal and external communications
  35. 35. RAQS Key Functional Areas– Vendor management • Vendor registration & qualification • Vendor performance assessment • Vendor rating– Project tendering • Project notice advertising • Document distribution • Contractor communications– Bid results and evaluation • Results evaluation / trend analysis • Awards
  36. 36. Simplified 3M team rating (TQRDC) T – Technology Q – Quality R – Responsiveness D – Delivery C – CostCourtesy: Jeff van GeelManager Sourcing & Accounts Payable
  37. 37. Courtesy: Jeff van GeelManager Sourcing & Accounts Payable
  38. 38. Simplified Scorecard 1. Focus on improvement 2. Present facets of performance without aggregation. Do not dilute message. 3. Communicate dashboard – detail in meeting 4. Scope: all material & servicesCourtesy: Jeff van GeelManager Sourcing & Accounts Payable
  39. 39. All information for exercise onlyCourtesy: Jeff van GeelManager Sourcing & Accounts Payable
  40. 40. 1. Construction – Commodity - Contract2. Contractor - Consultant3. Consistency - Customizable4. Crowdsourcing – Collaborative - Comments5. Compare - Contrast6. Credible – Context7. Cost
  41. 41. ABC Contracting Grand River Ford’s Excavation Landscaping
  42. 42. • For ratings that are “Below Standard” and explanation must be enteredEasy to create, fill out and explain!
  43. 43. Easy colourcoding tospot whatneeds to bereviewedquickly.Data can beexported forfurthercalculations/analysis ifrequired.
  44. 44. 1. Effective communication throughout engagement 25%2. Quality of resources3. Availability of resources to carry out contract 17% 16%4. Quality of the final deliverables 15%5. Providing value added services 10%6. Maintaining timelines/deadlines 8%7. Budget/cost control 5% 4%8. Having a vendor contact for dispute resolution 1 2 3 4 5 6 7 8
  45. 45. Survey Says
  46. 46. What are your greatest challenges to having an effective VPM! 30 Pick more than one! 251. Not enough time2. End user input difficult to 15 15 get3. Poor systems 94. Not required5. Missing linkage between 4 contract and performance6. Comparative Consistency 1 2 3 4 5 6
  47. 47. Do you share performance results with contractors - consultants? 271. Yes2. No 9 1 2
  48. 48. Do you tie performance management data to proposal evaluations and selection? 231. Yes2. No 9 1 2
  49. 49. 52
  50. 50. Gerald Ford CSCMP Leopold Koff CSCMPgrford@csolutions.org 226-474-1169 lkoff@conestogac.on.ca 905-296-4003 Kim Dooling CPPB KDooling@oakville.ca Corporate sponsors 53

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