Strategic Supply Chain Management in Software

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processes. The processes include activities at the wholesale level, where there are depot operations, and in commercial industry through the procurement role. These processes create an operational architecture that is role-based. After documenting the processes, often it s necessary to restructure. Thus there s the need to define new roles and make policy changes, doctrinal changes, organizational changes, and information technology changes. Then there s the special attribute of the Marine Corps: It moves in groups, in what s called Marine Air Ground Taskforces (MAGTFs). As Kinney explains, When you go into a situation, you go with a MAGTF. You don t go anywhere without the whole group. There is no splitting aviation or logistics off by itself, for instance. Because of the special role of the logistics element, it has become a fifth element in the MAGTF, historically comprised of four elements: a command element, a ground combat element, an air combat element, and a combat service support element. The fifth element is now considered the supporting establishment. A MAGTF can range from 100 people to a Marine expeditionary force, which could be 18,000 strong. What will be the metrics of success for the FLE program in the Marine Corps Having just finished its process reengineering, the Corps is now readying to buy empowering applications and other IT, using the enterprise integration toolkit developed through one of the three triangle groups of the FLE. The attributes it expects all its programs to have are reliability, responsiveness, flexibility, expense containment, and asset utilization. All these are embedded in the SCOR model. However, the Marines have added a sixth attribute: readiness. It wasn t in the SCOR model [developed for industry], but it s obviously critical to the DoD, says Gavin McCarthy of the Log Vision Center.
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Core Discipline 5: Use Metrics to Drive Business Success
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Most people agree with the adage, If you can t measure it, you can t fix
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it. Yet few metrics programs actually provide a clear picture of overall performance, pinpoint the root of performance problems, or identify improvement opportunities. The reason is simple: Establishing a robust and useful performance measurement program is difficult! Just getting agreement on what to measure, how to define the chosen metrics, and how often they should be measured can be a major effort. And getting management to agree on the fundamental purpose of a metrics program can be the most contentious activity of all. Think about the metrics your company uses to determine its operational health. Like many companies, you may have functionally focused scorecards for customer service, purchasing, and manufacturing already in place. Few companies, however, track cross-functional supply chain metrics, even though actively monitoring these metrics for management purposes is a key component of an integrated supply chain organization (see 3). Most corporate metrics focus on financial impact and outcomes. This isn t surprising because financial reporting must be done on a regular basis. Financial metrics are also relatively easy to obtain once the books are closed for any given period. Moreover, regulations such as the Sarbanes-Oxley Act
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Strategic Supply Chain Management
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of 2002 oblige companies to be thorough about ensuring the validity of their financial data and diligent about documenting the controls and procedures used to arrive at those numbers. (Sarbanes-Oxley requires that officers of U.S. public companies certify the accuracy of their financial statements and the effectiveness of the associated disclosure controls and procedures. As such, it requires that companies establish and actively manage sound internal controls.) Indeed, many executives laud the Sarbanes-Oxley Act for enforcing good business practices and providing external validation for company initiatives.1 The strict reporting requirements give managers more and better information that can make business processes more efficient and costeffective. Some executives even regard the Sarbanes-Oxley Act as a leverage point in making the case for process improvement. Yet, while financial metrics can help to gauge the impact of process changes on a company s financial health, we think they re inadequate when it comes to measuring supply chain performance. Why Since most financial measures are historical, they don t provide a forward-looking perspective and can be very difficult to tie to operational effectiveness. Nor do they provide insight into strategic nonfinancial performance indicators such as order-delivery performance and customer service levels. What exactly is a metric The Merriam-Webster Dictionary defines a metric as a basis or standard of comparison. Note that by this definition, a stand-alone number or value is not a metric. A number or value only becomes a useful management tool when compared with another number or value. This is the premise of an effective performance measurement program.
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