Performance Measures, Assessment Tools, And Techniques For Supply Chain And Operational Processes

Establish strategies to monitor and evaluate performance and sustainability for key systems and processes

In order to monitor, and evaluate performance and sustainability for each of the processes, it is essential to develop benchmark for deliverables and outcomes. The typical parameters for benchmarking are Productivity, Budget, and time. The benchmarks shall be objective, measurable and is defined quantitatively. In order to aid in the process of monitoring, SMART goals shall be developed. This will help to monitor and evaluate adherence to the time-schedules for sourcing, procurement, transportation, warehousing, manufacturing, etc. are maintained and crosschecked for accomplishment. However, in the case of product or service delivery they key strategy for performance measurement is the evaluation of quality.

Evaluation of performance for Supply chain can be done through Flow Charts. This chart provides the flow of materials and information. Any deviation from the expected process can be immediately tracked. The critical performance measures include Turnaround time, quantity of products transferred, cost of transportation, cost of warehousing and maintenance.

In the case of Operational systems, the above methods of check sheet and flow chart can be used. The critical performance measures will include downtime, communication standards, cost of training, number of employees required, and productivity. However, Cause and Effect diagram is another assessment tool that helps to identify the cause of failure in the operational systems and processes. While the Product/service delivery can be tracked using a checklist, the effective assessment tool is Survey tool and SERVQUAL. Survey tools help to identify the quality perception of the products or services delivered. The SERVQUAL is a modern service quality assessment considering the consumers perception as well as optimum utilization of resources. The performance measures will include, customer satisfaction index, quantity of produce manufactured, number of products present in the supply, demand-supply gap, and revenue generated.

The advantages of checklist method for monitoring of supply chain and operational processes are that it allows identification of all the relationships and impacts. This method also increases the degree of awareness for execution of the processes and tasks. However, descriptive checklists are time-consuming to develop. The advantages of using flow chart are that it is easy to use and easily understandable. However, developing the flow chart for supply chain or operational processes is highly time- consuming. Since the flow chart uses looping and branching of task, it is difficult to represent them especially when the process is complex.

The advantage of Survey tool is that it helps to capture the perception of the key stakeholders to the business. However, it is essential to note that the survey tool increases the risk of bias and may lead inappropriate analysis of the process and procedures. The advantages of SERVQUAL as a quality management tool for Operational process and product or service delivery is that it allows identifying the gaps in the process effectively. Further, this tool is also effective to identify long-term risks to the business processes. However, this method focuses on the process rather than the outcome. Hence, this model is not able to assess the financial and psychological outcome of the process or service delivery.

Develop performance measures, assessment tools and techniques to evaluate the performance and sustainability of key systems and processes

According to the annual report of ALDI (2017), the following strengths, weaknesses, risks and opportunities can be identified: –

Strengths	Weaknesses
· Has strong brand value in Australia. · The organization has strong focus on sustainability with major focus on recycling and 75 % of the refrigeration system uses climate friendly refrigerant. · The organization invests high on employee training and development.	· Due complex political, economical and social dynamics, the organization doesnot have a concrete product tracing method in order to enhance the traceability of the products and associated sources. · The changing in customer expectations proves to be a challenge in terms of catering the required products.
Threats	Opportunities
· Cannibalization of the sales revenue for each retail unit is challenging. · The lack of high process automation compared to competition may lead to less agile business process.	· With increased focus on sustainability, Aldi will be able to offset their losses through reduction in waste. · With increased training and development focus, Aldi will be able to ensure continuous development of employee to introduce change and process development.

Performance Improvement Strategy is concerned with the improvement programs of an organization to enhance and improvise the performance of their employees with the help of definite strategic decisions. Aldi has been implementing such performance enhancement strategies to enhance the productivity and performance of their employees in a much more synchronized manner. An integrated performance improvement strategy is deployed by the organization to develop successful solutions to performance management. There are number of ways performances can be improved in an organization. The strategies are:

Transparent communication: The basic strategy implemented by Aldi is a transparent communication without which employees can be dissatisfied and even bereft of proper information. Information related to the performances, goals and alterations in business focus of Aldi must be duly informed so that employees can make proper adjustments to it.

Reward Good work: When employees excel at a definite thing, Aldi must rewards their employees to motivate them to attain their organization’s goals.

Employees’ empowerment: Employees of Aldi are given an empowerment to come up with their own set of strategies and thereby take part in the decision making process. This will help to improve their performances and lead them to the preferred goal.

Provide definite equipment: It is necessary to provide employees with proper tools and equipments that can make their work easier and swifter. It will also make their joib safe and effective.

Training: Training forms a crucial part in improving one’s performance. Provide them with training and different developmental programs to hone their skills. Aldi has retail management Training Programs, Store Management Training Programs and many more.

Promotion within: Employees must be given an opportunity to make an advancement of their careers and internal promotion will motive employees of Aldi to work effectively. 

This can be considered as the reviewing of the risk that is associated with a particular action or event. This tool is implemented when any work involves risk. This is a part of risk management. A retail organization like Aldi can be tough competitions, consumer trends, Economic conditions Transformation risk and brand reputation.

Competition: To analyze the completion in the market Aldi has to consider promotional and pricing strategies, virtual and physical presence, delivery cost expectations and many more. Aldi follows the strategy of cost leadership to cope up with their competitors and thereby makes a risk analysis of their current competitors.

Consumer Trends: It is necessary to consider and make meaningful interaction on social media to understand the trends in the market. Aldi does this through different networking sites.

Economy of the country: Australia being the major export has a noticeable development of their economy in recent years and this can be advantageous for Aldi. The economy has advanced to 1 percent in the March quarter of 2018.This economic growth can be less risky for retailers.

Transformation Risk: This can include issues like project management problems, communication failure, technical issues and many more. Recently, as per the supermarket report card, Aldi has scored too low in their efforts for preventing obesity and this can be a risk for their business as this portrays their negligence to Corporate Social Responsibility.

Evaluate effectiveness of review strategy

This is considered as the estimation of the weaknesses and strengths of alternatives. In retail, sectors Radio Frequency Identification are implemented and this can be analyzed based on their benefits and cost. Aldi implements such technology in their supply chain. Supply chain consists of retailer, distributor, consumer, manufacturers. The transactions that are generated with the assistance of varied RFID tags reads as well discuss on the implementation cost of such tag readers, infrastructure and the communication network cost. Aldi follows an analytical model that considers the advantages of the implementations that includes automatic checkout at their retail stores as well as diminished inventory costs for an effective self-replenishment.  

Cost benefit analysis provides an objective way that helps in comparing projects. Although a cost benefit analysis is a useful tool for decision-making but its accuracy is limited by the detailing of understanding likely benefits and costs. If Aldi fails to understand the potential benefits and cost it can lead to weak results, which finally leads to sub-optimal decisions.

Cost	Year 1	Year 2	Year 3	Year 4	Year 5
Development Cost	$200000	$5000
Operating Cost	–	$7000	$8000	$9500	$10000
Total cost	$200000	$12000	$8000	$9500	$10000
Benefits
Tangible Benefits	–	$14000	$16000	$16500	$22000
Intangible Benefits	–	$3000	$5000	$8000	$10000
Total Benefits	–	$17000	$21000	$24500	$32000

Cost Benefit Analysis

Source: Created by the learner

The action plans for transition and communication is as follows: –

Objectives:

To implement the RFID in the manufacturing level  and support item creation, item loading in a case, case loading  into a pallet and finally into the delivery truck.

To make successful pallet placement in their warehouse and move to the retail store

To make the pallets reach the retail store and finally to the consumer’s house.

Timeframes:

A particular time needs to be allotted for RFID implementation:

RFID time frame	Time taken
Procurement of RFID	1 year
Implementation of RFID	2 years

Measures:

The time that can be allotted to implement the action plan is the sum of the total time taken for procurement as well as implementation. The table shows that 3 years time will be taken to implement such an action plan.

The cumulative cost for RFID has been given in the form of a table:

Equipment cost	90,000
Installation Costs	5,000
Tag Costs	15,000
Software Costs	45,000
Ongoing License Costs	30,000
Maintenance Costs	40,000
Integrator Costs	15,000
Total cost	24,0000

The action plan will involve labors not less than 500 as this implementation with at least 10 staffs specialized in software and hardware technology of the framework. Proper training and skills development of employees for installation is mandatory. Later educating employees in retail store for scanning the tags must also be conducted.

Contingency plans are implemented to address risks due to non-performance, internal factors or external factors. Risk assessment has to be made by ALDI periodically every month in order to identify any instances of system failure of the RFID systems. Emerging challenges has to be accessed using Risk logbook, which is maintained weekly. This also aids towards recording process success and gaps in implanting the RFID system. The possible contingency plans are as follows: –

• Contingency Plan 1: In order to address RFID tag failure, it is essential to maintain a stock of new RFID tags, which can be replace actively during the start of daily operation. A system will be in place in order to program the tag according to the needs. This will help to ensure business continuity.
• Contingency Plan 2: In order to address RFID system failure, it is essential to maintain a standby relation with the service provider. Monthly checking of the system is critical in order to prevent possible system failure. In this regard, a communication logbook will be maintained to record the periodic checks and the diagnostic results to be shared with the management and the service provider.

The RFID implementation will help in enhancing the efficiency of the employees and also fors a hindrance to theft and loss of products. Aldi has been facing an extensive loss due to stealing of products by their own employees. To stop these activities RFID will be helpful.However one must not forget that the action plan will involve a huge cost and will require good amount of time. Cost and time are two such factors that can hardly be avoided.

The continuous improvement schedule is as follows: –

Activities	Time schedule
Assessment of process	Monthly
Assessment of risk logbook	Weekly
Measurement of performance	Monthly
Identification of process gaps	Quarterly
Development of plans	Within 15 days of quarterly review

Reference

Aldi, 2017. Sustainability Report 2017. Sydney: Aldi

Amendola, S., Lodato, R., Manzari, S., Occhiuzzi, C. and Marrocco, G., 2014. RFID technology for IoT-based personal healthcare in smart spaces. IEEE Internet of things journal, 1(2), pp.144-152.