What to measure is an important aspect of your continuous improvement initiative, this aspect of the initiative is critical to the success of any improvement initiative.  After discussing the importance of measuring collaboration and understanding that in order to ensure continuous improvements you must measure your progress you’ve probably come to the realization that now you must determine what to measure.  In addition to defining what to measure you must also define an evaluation process for your measurements; a continuous improvement program for your measurements if you will. 

The key performance indicators important to a collaborative partnership are two-fold; on one level you must measure the ‘standard’ extended supply chain performance indicators like time from receipt to stock, time to fill an order from when it drops to the supplier until when it is received by the customer, receipt performance (all items identified on receipt, packaging requirements, compliance to PO).  These performance indicators must be standard across all of your extended supply chain and collaborative partners.  These performance indicators can be standardized across your partners.  The difference, and the challenge, here is developing the measurement comparisons across the collaborative partners.  This is a critical step to open and honest communications also.  This will allow you to honestly analyze and identify the strengths of each of your collaborative partners.  This will also allow you to honestly analyze and determine best practices across your collaborative partners to share and include in your continuous improvement initiatives.

The second level of performance measurements are related to collaboration and must measure the ‘relationship’ side of the partnerships.  These measurements provide the basis to adjust your collaboration and increase opportunities for sharing and working together.  These measurements are more perception and yet the perceptions will help to drive the collaboration across your partners and will also help to drive the value gained from the partnerships.  These performance indicators should focus on the foundation of your collaborative partnerships which is what, or how, are the partners supporting each other.  These performance indicators will include cost of course and execution performance of course.  These performance indicators however must also include a comprehensive measurement of the entire extended supply chain and consolidated chain performance.  This will require collection and analysis of data across all of your partners and it requires commitment and sharing (collaboration) across your partners in order to bring the collection and analysis together. 

The challenge of defining, collecting and analyzing performance indicators across your extended supply chain and your collaborative partners may have been overwhelming 5 years ago.  Today, however, you have the opportunity to incorporate big data principles, practices and capabilities to analyze and identify the value streams and the collaborative performance improvements available across your partnerships.  The promise and the capabilities represented by big data will make the difference between success and failure.  The promise and the capabilities represented by big data will kick your value achievements and performance improvements into high gear and drive your partnership success into the future.

And now for the audience participation portion of the show…

What are your communications practices with internal and external customers?  Are these practices the same for internal and external customers?