Ndiba Kamau - Research Report - Measuring and Evaluating

Microsoft Word - Ndiba_Kamau - Research Report - Measuring and Evaluating Performance in Integrated Supply Chain Management by Ndiba Kamau _USIU Student ID 625528_INTEGRATED SUPPLY CHAIN MANAGEMENT
A Project Report Submitted to the School of Business in
Partial Fulfillment of the Requirement for the Degree of
Master of Business Administration
UNITED STATES INTERNATIONAL UNIVERSITY –
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DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other college or university other than the United States International University for
academic credit.
Signed: Date:
Ndiba Kamau (Student ID. No. 625528)
This project paper has been presented for examination with my approval as the appointed
supervisor.
Copyright © Ndiba Kamau 2014
No part of this project may be reproduced, stored in a retrieval system or transmitted in
any form or by any means electronic or mechanical without prior written permission of
the author.
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ACKNOWLEDGEMENT
My appreciation goes to my supervisor, Dr. Paul Katuse for his guidance through this
research project.
Ndiba Kamau
2014
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DEDICATION
To my parents, the late Johnson Kamau Karuga and Jane Wambui Kamau, thank you for
the care and best provisions in my upbringing and for your sacrifices.
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ABSTRACT
The purpose of this study is to examine performance measurement and evaluation in
supply chain management in the healthcare industry considering a case of a
pharmaceutical company and its supply chain partners in the donor sector. The specific
objectives of the study were to explore integration of supply chain management in
healthcare, to investigate supply chain evaluation approaches and explore the key
performance indicators for the health care supply chain programs. The study employed a
qualitative research approach. This was because the study aimed at obtaining specific
information concerning measuring and evaluating performance in the donor funded
supply chains administered by Phillips Healthcare Services Limited.
The population of the study consisted of donor funded program implementing agencies,
project managers and outsourced supply chain partners for the various supply chains
considered. The data was collected through questionnaires. The questionnaires consisted
of closed and open end questions and were administered to the respondents through
interviews. Descriptive statistics was used to analyze the data using the Statistical
Package for Social Sciences (SPSS) and the information was presented in the form of
percentages and frequency distribution tables.
The findings of the study showed that the various supply chain programs run had an
integrated approach in managing their activities. However, most respondents disclosed
that no specific supply chain performance measurement and evaluation approach had
been specifically being used though most exhibited elements of the performance prism
approach to measuring and evaluating their supply chains through stakeholder
engagements. Key performance indices were also identified and most related to customer
satisfaction. The major finding of the study conducted was that there was a consensus that
measuring and evaluating performance was important in managing the supply chains. The
study confirmed that with the various stakeholders involved, it was important that their
activities be integrated so that they are aligned and able to develop approaches to
achieving excellence in the performance of their supply chain programs.
The major conclusion was that more needs to be carried out for the supply chains to
develop key performance indices that would guide their activities towards achieving their
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objectives set out in their business strategy. This can be achieved through adoption of
performance evaluation approaches that would help them work towards a balanced
approach to managing various business activities relating to customers, internal business,
finances and learning needs of the businesses. From the above conclusions, the study
recommended that more collaborative efforts should be done and lead by senior
leadership of the various organisations. In addition, approaches and tools to achieve
balance across all business units involved in the supply chain should be used to guide
performance and evaluation of the supply chains.
For the various healthcare programs, industry players need to come up, jointly, with
performance indicators that can be used to guide their work activities and benchmark
their performance against set or desirable outcomes for the health concerns. Further
research should be undertaken to investigate the sustainability of partnerships between
donor agencies and the private sector in healthcare supply chains. The coordinated roles
of governments and the private sector should also be considered to address concerns for
the particular sectors in providing efficiency and excellence in delivery of the intended
healthcare outcomes.
Table 4.2: Job Description of the Respondents………………………..…...…………….28
Table 4.3: Gender of the Respondents…………………………..…………..…………...29
Table 4.4 Experience of Respondents………………………………..……….………….29
Table 4.5 Level of Academic Qualification……………………………..……………….30
Table 4.6: Assessment of Supply Chain Opportunities………………….….…………...30
Table 4.7: Respondents Opinion on Senior Management Involvement in Visioning…...31
Table 4.8: Development of Supply Chain Strategy by Partners………………....………31
Table 4.9: Benchmarking and Responsiveness to Market Needs……………..…....……32
Table 4.10: Partner Involvement in Joint Planning Sessions………………….....………32
Table 4.11 Existence of Quality Management System………………………..…………33
Table 4.12: Partnership Structure in Place………………………………...……..………33
Table 4.13: Information Sharing and Communication Network in Place…………..……34
Table 4.14: Stakeholder Involvement and Commitment to Change………………..……34
Table 4.15: Measuring Supply Chain Performance can help Manage Supply Chain……35
Table 4.16: Identification of Supply Chain Evaluation Approach/Model…………….…36
Table 4.17: Program Familiarity with Balanced Score Card Performance Model……....36
Table 4.18: Stakeholder Perspective on Performance of Supply Chain……………........37
Table 4.19: Customer Perspectives Inform Performance of Supply Chain………...…....37
Table 4.20: Internal Business Objectives…………………………………….………..…38
Table 4.21: Balanced Score Card Perspectives and Decision Making…………….….…38
Table 4.22: Customer Relationship Management and Collaboration………………....…39
Table 4.23: Innovation and Learning and Influence on Quality Improvement………..…39
Table 4.24: Procurement and Information Management…………………….…….…….40
Table 4.25: Providing Information to customers…………………………………….…..40
Table 4.26: Provision of Technical Support and Problem Solving Excellence…..……...41
Table 4.27: Flexibility to Meet Customer Needs…………………………………....…...41
Table 4.28: Delivery Documentation Quality…………………………….….……..……42
Table 4.29: Staff Capability and Skills…………………………………..………..……..43
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Table 4.32: Appreciation of research conducted……………………………….………...44
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1.2 Statement of the Problem ................................................................................................ 4
1.3 Purpose of the Study........................................................................................................ 5
1.6 Scope of the Study........................................................................................................... 6
2.5 Chapter Summary .......................................................................................................... 20
3.3.1 Population .............................................................................................................. 22
3.5 Research Procedures...................................................................................................... 25
3.5.2 Administration of the Questionnaire ....................................................................... 25
3.6 Data Analysis Methods .................................................................................................. 26
3.7 Chapter Summary .......................................................................................................... 26
4.1 Introduction ................................................................................................................... 27
4.4 Supply Chain Performance Evaluation Approaches ....................................................... 35
4.5 Performance Indicators .................................................................................................. 40
4.6 Chapter Summary .......................................................................................................... 45
5.1 Introduction ................................................................................................................... 46
5.2 Summary ....................................................................................................................... 46
5.3 Discussion ..................................................................................................................... 48
5.4 Conclusion .................................................................................................................... 54
5.5 Recommendations ......................................................................................................... 56
APPENDIX TWO: QUESTIONNAIRE .......................................................................... 65
1.1 Background of study
In the current competitive markets scenario, supply chain management assumes a
significant role and calls for serious research attention, as companies are challenged with
finding ways to meet ever-rising customer expectations at manageable costs. To do so,
businesses must search out which parts of their supply-chain process are not competitive,
understand which customer needs are not being met, establish improvement goals, and
rapidly implement necessary improvements (Jain et al., 2010).
Supply chain management along with other similar terms such as network sourcing, value
chain management have become subjects of increasing interest in recent years. It is
recognised that supply chain should be seen as the central unit of competitive analysis
(Macbeth & Ferguson, 1992; Cox, 1996). Companies will not seek to achieve cost
reductions or profit improvement at the expense of their supply chain partners, but rather
seek to make the supply chain as a whole more competitive (Christopher, 1992).
Intensifying global competition, short life cycles of products and increased customer
expectations have forced companies to invest and focus their attention on their supply
chains. Along with continuous advances in communication and transport technologies,
the need for continuous evolution of supply chain and effective management techniques
is paramount (Simchi-Levi et al., 2008). Supply chain management means managing the
series of activities concerning the planning, coordinating and controlling movement of
materials, parts and products from suppliers to customers. This includes the management
of materials, information and financial flows in the supply chain. The decisions are made
at strategic, tactical and operational levels throughout the supply chain (Simchi-Levi et
al., 2008).
Gunasekaran et al. (2001) present that supply chain performance measures can be divided
into financial and non-financial measures. Top management needs financial measures for
management level decisions, but lower management and workers need operational
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measures for daily business. Gunasekaran et al. (2001) states that there should be several
kinds of measures to be used in performance metrics: balanced approach, strategic,
tactical and operational levels and financial as well as non-financial measures. Supply
chain management could be measured in various management or operation levels.
Strategic level measures influence the top management decisions and also very often
reflect the investigation of broad based policies and level of adherence to organisational
goals. The tactical level deals with resource allocation and measuring performance
against targets to be met in order to achieve results specified at the strategic level.
Operation level measurements and metrics require accurate data and decision is made by
low level managers. In operational level, metrics are relevant for day to day business and
hence the main metrics are time related and non-financial metrics. Non-financial metrics
include such as order lead time and delivery lead-time. Many of these metrics are time-
related but also cost-related. These metrics are for top management for making strategic
decisions as well as long-term plans and strategies.
Christopher (2001) describes a network of companies to which interdependent
organisations are linked up can be regarded as a supply chain. The success of the
individual organisation is dependent upon the management of its supply chain and is
largely dependent on the performance of its suppliers (Christopher, 1999). However, most
organisations within a supply chain operate independently with their own objectives
which differ from the objectives of their supply chain partners. Due to the limited time in
which companies can develop trust, it is widely accepted that supply chains require
common systems to integrating, measuring and controlling key business processes
(Childerhouse and Towill, 2000).
Thus, each enterprise must seek not only to improve its own individual competitiveness
but also to improve the competitiveness and performance of all enterprises in its supply
chain. To succeed as a member of a supply chain and make the supply chain to work as a
whole, firms must today develop strategic partnership arrangements with their key
suppliers and customer enterprises. This involves sharing information, working together
to reduce costs and to cut down lead-times and building total quality into all stages of the
supply chain (Christopher, 1999).
Performance measurement systems are the focus of considerable attention in academic
and practitioner communities. They clearly have a considerable contribution to make the
management of performance of organisations. However, for this contribution to be
realised, it is essential that the measurement systems used are relevant and appropriate for
the environment and strategies of the organisation. Given the dynamic and rapidly
changing environment in which most organisations compete, it is important that
organisations effectively manage their measurement system so that it remains appropriate
and provides information that is relevant to the issues that are of current importance
(Mike & Andy, 2003).
There has been considerable interest in performance measurement. Well rehearsed adages
such as “What gets measured gets done” and “You get what you measure” suggest that
implementing an appropriate performance measurement system will ensure that actions
are aligned to strategies and objectives (Lynch & Cross, 1991). Increasingly, research
evidence is demonstrating that companies that are managed using integrated balanced
performance measurement systems outperform (Lingle & Schiemann, 1996) and have
superior stock prices to those that are not “measure managed”.
The supply chain consists of many stakeholders such as suppliers, manufacturers,
retailers and activities such as forecasting, purchasing and marketing and hence, the
complexity and large network affects one another’s performance (Chan, 2003). Decision
makers in supply chains usually focus on developing measurement metrics for evaluating
performance (Beamon, 1999). Beamon suggests that performance measures in existing
literature are in two types: qualitative and quantitative in which flexibility, supplier
performance, costs, customer satisfaction and responsiveness for supply chain model are
discussed. Three types of measures: resources, output and flexibility are identified. Li and
O’Brien (1999) proposed a model to improve supply chain efficiency and effectiveness
based on four dimensions profit, lead-time performance, delivery promptness and waste
elimination.
Van der Vorst (2000) divided the performance indicators into three levels: The supply
chain level (product availability, responsiveness, delivery reliability, quality and total
supply chain costs), the organisation level (inventory level, throughput, time,
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(responsiveness, throughput time, and process yield and costs). A performance
measurement system provides information necessary for effective planning and control,
decision making and actions. According to Kleijnen (1993), the feedback principle in the
context of supply chain performance measurement is used by managers to compare a
target value for a specific performance metric with its realisation and in the event of
undesirable deviation; corrective action can then be taken. The feedback principle links
an operational response in the supply chain to a given key performance indicator.
This study contributes towards looking into the state of healthcare supply chain carried
out by Phillips Healthcare Services in carrying out donor funded programs aimed at
reaching the bottom of the pyramid groups in Kenya. Kenya faces a number of challenges
in reaching its disadvantaged population that suffer from a myriad of health concerns
ranging from HIV/AIDS, asthma, tuberculosis, diabetes, malnutrition and diarrhoea.
Delivery of essential medicines to this population has been hampered by an ineffective
supply chain system and by the high cost of the medicines. Currently, capacity building
efforts are being carried out by donor agencies to support Kenyan health agencies in
designing health delivery systems.
Recently, donor agencies have partnered with the private sector in setting up healthcare
supply chain programs with the aim of transferring these initiatives to the Ministry of
Health departments in charge of implementing health policies in Kenya. However, as
their capacities are being built, there is need for an informed method of evaluating the
performance of the healthcare delivery systems to inform this process. Phillips Healthcare
Services was identified as a private partner that has had the experience to provide these
services before being transferred to the public sector and provides a useful case study in
evaluating supply chain management performance in the healthcare sector in Kenya and
beyond.
1.2 Statement of the Problem
Kenya faces a myriad of health concerns for the bottom of the pyramid population that
does not have access to a responsive, quality, reliable, affordable healthcare and medicine
supplies hence, there is need to provide a responsive supply of essential medicines to this
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population in Kenya, that form the majority of recipients, through an efficient supply
chain. To ensure an efficient supply chain, performance evaluation of the supply chain
must be undertaken to advice management of the processes involved. The healthcare
sector is composed of complex sets of entities, activities and processes involving a wide
range of participants, priorities and evaluation criteria. Governments invest a lot of
money in healthcare directly or indirectly and expect high quality services from this
sector. In reality, the performance of the sector has been different and characterised by
inefficiencies, low productivity and dissatisfied clients.
Performance measurement is an established concept that has taken renewed importance in
a variety of organisations (Camarata et al., 2000). Performance measurement systems
have been developed as a means of monitoring and maintaining organisational control
which ensures that an organisation pursues strategies that lead to the achievement of its
overall goals and objectives (Nani et al., 1990).
Bititcti (2000) identified that performance measurement systems need to have the
characteristics of being sensitive to changes in the external and internal environment of
the firm, reviewing and reprioritising internal objectives when the changes in the external
and internal environment are significant enough, deploying changes to internal objectives
and priorities to critical parts of the firm to ensure alignment at all times and ensuring that
gains achieved through improvement programs are maintained. Performance
measurement provides the basis for a firm to assess how well it is progressing towards its
predetermined objectives, identifies areas of strengths and weaknesses and decides on
future initiatives with the goal of improving organisational performance. This study seeks
to explore the extent to which various actors in health care supply chains measure,
evaluate and manage performance of their supply chains upstream and downstream.
1.3 Purpose of the Study
The purpose of this research was to analyse a supply chain and find out how integrated it
is with other supply chain partners, performance measurement systems in use and the
indicators that were applicable in ensuring efficient healthcare supply of essential
medicines of the donor funded programs in providing healthcare related products to
bottom of the pyramid population in Kenya.
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1.4 Study Objectives
The study was guided by the following research objectives that offered guidance as
regards collection of the required information on the research topic.
i. To explore integration of supply chain in healthcare.
ii. To investigate supply chain performance evaluation approaches.
iii. To explore key performance indices for the health care supply chain.
1.5 Significance of the Study
This research will help understand the benefits of a performance measurement system in
an integrated supply chain management in providing essential healthcare medicines to
bottom of the pyramid groups. It will help determine the extent to which an integrated
supply chain has been achieved for the organisation and its supply chain partners and
identify performance indicators suitable for performance measurement of healthcare
supply chains.
Through this research, academicians will benefit from the knowledge generated to gain
new insights in the field of supply chain management in the areas of performance
evaluation and measurement of integrated supply chains in healthcare supply chain
partnerships. From the various research questions and findings made, partnering
organisations in supply chain industry will benefit from learning on how to integrate their
business activities, develop aligning strategies and develop appropriate tools to measure
and evaluate performance of their supply chains.
1.6 Scope of the Study
The focus of this research is the evaluation of the performance management system of
Phillips Healthcare Services and its Partners in Kenya. The time period for the analysis is
2010 – 2013 The study does not go into details of the whole scope of the term supply
chain management. This research is aimed at giving a view of the methods that can be
used to evaluate if a supply chain is efficient or not based on a performance measurement
system.
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1.7 Chapter Summary
This chapter has looked at supply chain management and its importance to an ever
evolving global business environment. The chapter has offered definition of terms that
are not common and this introduction provides a guide on what the research shall focus
on. Chapter two shall look at literature review on supply chain management particularly
as regards to evaluation of supply chain performance measurement systems. It will also
explore existing studies and literature on the role of an integrated supply chain in building
business partnerships. It will compare and critique other works previously covered on the
topic.
Chapter three identifies, defines and provides justification for the research design used in
the study. It also provides the data collection instrument that was used and the population
identified with sampling frames, techniques, size of the sample and data analysis
methods. Chapter four provides an analysis of the findings and results from the data
collected. The data presented makes use of quantitative and descriptive statistics to
present the data gathered from the study. Chapter five discusses findings of the study and
is based on the objectives set out for the study. Major conclusions are provided as well as
recommendations for further studies.
2.1 Introduction
This chapter presents a review of various factors related to supply chain management that
are of importance as done by other researchers in previous studies. The development of
this chapter will be guided by the research questions in chapter one which are what
constitutes an integrated supply chain, the application of supply chain performance
evaluation models and to identify performance indicators and which performance
evaluation models best combines them.
2.2 Integrated Supply Chain Management
2.2.1 The Nature of Supply Chain Management
Supply chain management is a management philosophy aimed at integrating a network of
upstream linkages (sources of supply), internal linkages (inside the organisation) and
downstream linkages (distribution through to the ultimate customers) aimed at
performing specific processes and activities that deliver products and services to satisfy
customer demands. Supply linkages are the explicit and/ or implicit connections that a
firm creates with critical entities in its supply chain in order to manage the flow and/ or
quality of inputs from suppliers into the firm and outputs from the firm to customers
(Rungtusamathan et. al, 2003).
Christopher (2001) demonstrates that supply chain management involves a set of three
elements; the first is supply management, which involves developing relationships and
integration with suppliers. The second is demand management, which uses techniques to
forecast demand accurately and develop relationships with customers. The third is
logistics management, which focuses on how members of a supply chain manage the
movement and storage of their products while integrating with other members of the
supply chain. The supply chain is thus viewed as a series of processes linked together
with cross company strategies and processes and its management enhances this idea and
creates coordination amongst all processes of all members, both downstream towards end
customers and upstream towards the suppliers of raw materials. The key objectives of
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supply chain management are responsiveness, reliability and the delivery of value. To
provide these features, supply chains must think in terms of how they can compete
through their capabilities and ask which parts of the supply chain are better at which
activities (Christopher, 2001).
Supply chain management is complex and can prove to be difficult to implement. It is
described as a multi-factor process, reliant upon close and long-term relationships within
and between organizations (Saad et al., 2002). The success of a supply chain management
system is associated with the challenge of developing a new culture based on shared
learning along with greater transparency and trust. With increased reliance on suppliers,
the emergence of business outsourcing and competition, the main challenge for the
supply chain management organisation is to sustain and continuously improve the
coordination and integration of all supply chain processes in order to enhance its overall
performance. Based on this principle, it is therefore important to associate the concept of
supply chain management based on continuous improvement with performance
measurement.
2.2.2 The Integrated Supply Chain
Supply chain integration means the co-operation between various functions in the supply
chain. The key processes that can be integrated across the supply chain are: customer
relationship management, customer service management, demand management, order
fulfilment, procurement, manufacturing flow management and product development
(Sillanpaa, 2010). The supply chain integration can be defined as the degree to which an
organisation strategically collaborates with its partners and manages intra- and inter-
organisational processes in order to achieve efficient and effective flows of products,
services, information, money and decisions (Sillanpaa, 2010).
The above definition of supply chain management implies the following key
characteristics of supply chain management which affect the design and implementation
of a performance measurement system for a supply chain. A supply chain should be
regarded as an integrated entity consisting of an interrelated network of multiple
participants at various levels, linked together by complex interrelationships. Supply chain
management is the integration of a number of core business processes. It reaches across
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different organisations and across different functions within an organisation, covering the
supplier base, all logistics entities, internal transformation processes and distribution. It
also includes the customer at the end of the chain. One of the keys to supply chain
success and advantage is the concept of integration. Supply chains are successful due to
seamless physical flow of materials to the end customers and efficient information flows
backwards and forward through the chain. This can however not be achieved if supply
chain members are not integrated in terms of their processes, activities and systems. The
advantages of integration include improved quality, innovation sharing, reduced costs and
improved scheduling of production and delivery (Porter, 1985).
The first step in achieving supply chain integration is through each company in the supply
chain looking to their internal structure to see if they are aligned and integrated. Without
the correct internal integration there cannot be effective integration throughout the supply
chain. The traditional view of functional divisions needs to change to an approach based
on customer focused material flow without boundaries. Instead of having functional
specialists with their own individual goals and strategies, companies must align their
internal functions along processes that lead to specific product and service value.
Companies have to bring on board workers with a broad range of skills who are oriented
to market success based on managing processes that deliver value to the customer
(Christopher, 2001).
The second step in achieving supply chain integration is through external integration.
This can only be achieved when internal integration has been achieved and functional
strategies have been aligned. To compete as a supply chain, there must be consistent
competitive goals, objectives and criteria across the supply chain without conflicting
priorities. When looking to integrate outside with other supply chain members, there must
be a systems view of the supply chain. The view must encompass linkages in customer
service, distribution, manufacture and procurement so as to deliver high service levels
and low cost to customers. The need for this integrative view is that achieving cost or
lead time reduction within one enterprise at the expense of other supply chain members
simply transfers costs or delays to the end customer, leading to higher prices and
customer dissatisfaction (Burt et al., 2001).
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The other factor in achieving supply chain integration is the concept of shared capabilities
and competencies. Previous thinking regarded the company as a separate competitive
entity, where there was no reliance on other suppliers or customers. Within supply chain
management, however, each member of the supply chain cannot be the best at every
activity and they need to rely on capabilities outside the organisation. Strategy must then
take into consideration which activities and capabilities each of the supply chain members
will invest in and perform and which will be outsourced in order to add the most value to
the supply chain as a whole (Cousins, 2002).
In a recent survey, Stanley et al. (2009) identified five barriers singled out by respondents
as inhibiting collaboration in their companies. Seventy-five percent agreed that
organizational structures propagating turf protection was the most pervasive barrier. The
four other barriers were singled out as resistance to change (58%), conflicting measures
(55%), lack of trust (42%), and weak managerial support (42%). Robert et al. (2009)
demonstrate that effective supply chain management relationships, whether informal or
formal, are broadened and matured by building the following: Trust is perhaps the
foundation of supply chain management. While trust is hard to quantify, it means that
channel partners can have faith in the intentions and actions of each other, that individual
company strategies are formulated with the good of the entire network in mind, and that
companies will not use their position of power to abuse more dependent members.
Reliability means that a company can count on its partners to exhibit consistent,
predictable, and honest behaviour over the long run.
Lack of congruence between commitments and behaviour erode supply chain
relationships. In addition, the use of coercion to force partners to act in a prescribed way
often results in less-than-reliable behaviour and is antithetical to the establishment of
strong channel relationships. Competence is concerned with the capability of a partner to
support and perform its channel the role as initially promised. Competence refers to the
ability of the partner’s organization to provide the people, processes, knowledge,
experience, technology, and resources that will ensure the viability of the channel
relationships. Risk is part of every business endeavour. Risk sharing in a supply chain
relationship, however, often extends beyond normal uncertainties, because there is an
implied external vulnerability arising from dependence on partners to perform their
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agreed upon roles. Trust, reliability, and a willingness to risk all contribute to a sense of
loyalty between channel partners. Loyalty is a two-way street, each partner not only
performs predictably but is also willing to assist each other to resolve problems or
ameliorate risk. Loyalty enables parties to engage in deeper commitment to the
relationship and by extension enriches the entire supply chain system (Robert et al.,
2009).
2.3.1 The Evaluation of Supply Chains
Considering the philosophy what you cannot measure, you cannot manage; measuring the
supply chain performance becomes a very important process for companies and their
supply chains in order to stay competitive. A major challenge in supply chain
management is the coordination of the various activities and processes that take place
between various parties involved in the value chain. Understanding the interdependencies
and complexity of these activities in the supply chain is elementary to managing it
(Holmberg, 2001).
According to Van der Vorst (2000), supply chain performance is the degree to which a
supply chain fulfils end user requirements concerning the relevant performance indicators
at any point in time and at what supply chain cost. This information enables managers
across the supply chain to monitor and improve actual performance, motivate all
participants in the supply chain, confirm progress in terms of supply chain objectives,
diagnose deviations from set objectives and provide a common database for the integrated
supply chain information system (Lapide, 2000).
The main objective of performance measurement is to provide valuable information
which allows firms to improve the fulfilment of customer’s requirements and meet the
firm’s strategic goals. Performance measurement provides information for management
and decision makers; enable identifying the success and potential of management
strategies and facilitating the understanding of the situation. In addition, performance
measurement assists in directing management attention, revising company goals and
reengineering business processes as well as for continuous improvement (Chan, 2003).
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In view of the complexity of the supply chain, several organisations and practitioners in
the field of supply chain management have developed unique approaches to evaluating
supply chain performance.
2.3.2 Balanced Score Card
Kaplan & Norton (1992) presented the balanced score card to measure the company
performance from four perspectives: customer, internal business, financial and innovation
and learning. The basic idea of the balanced score card is to maintain a balance between
lagging and leading indicators and between internal and external performance. The
balanced score card also facilitates to focus on the most critical measures by limiting the
number of measures used.
According to Wisner et al. (2005), customer satisfaction and service in the supply chain
relates to both internal and external customers and has to do with the degree to which the
customer is satisfied with the product and / or service delivered. This is one of the most
multifaceted supply chain performance areas. It can include supply availability which can
then be related to stock-out frequency, fill rate and full orders shipped. Customer
satisfaction is also determined by operational variables such as cycle time, consistency of
lead times and flexibility of supply. Reliability has to do with matters such as quality
compliance, dependability and availability of information. Customer satisfaction also has
some cost element that relates not merely to price but rather to all elements of the
customer’s total cost of ownership. Customer perception of service is highly intangible
and has to do with how the customer experiences the overall relationship with the
supplying firm.
Clearly, very specific objectives need to be set for customer satisfaction. These objectives
directly affect the competitiveness of the entire supply chain (Brewer et al., 2000). The
internal business perspective has to do with those activities and processes that create the
highest levels of customer satisfaction such as process productivity, cycle time reduction,
improving and concentrating on core competencies, improving staff skills and using
technologies that are the basis for competitiveness. The internal business perspective also
emphasizes operational process, design and manufacturing excellence and the ability to
introduce new products or services. The focus should be on the internal processes of the
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supply chain as a whole which in turn cascades down to the level of individual
organisations, functions and teams. In this way, individuals at every organisational and
functional level become directly involved in setting overall supply chain objectives
(Brewer et al., 2000).
Innovation and learning in supply chain performance evaluation impact on the ability of
all entities in the supply chain to continuously renew not only products and services but
also those processes that ensure that the supply chain as a whole maintains a competitive
advantage. The product development cycle time, the ability to implement innovative
distribution routes and processes and the ability to introduce increased flexibility into the
supply chain are ways of innovation and learning. A key element in innovation and
learning is the ability in the chain to create, maintain and improve partnerships. This is
because partnerships enable the supply chain to take advantage of the capabilities, skills,
knowledge and resources of new entities thereby introducing innovative dimensions to
competitiveness and ultimately to delivering customer service (Brewer et al., 2000).
The financial perspective is a measure that confirms that a supply chain is indeed
competitive and is delivering the required customer service. Financial measures are aimed
at determining profitability and profitability growth for each of the supply chain entities
and for the chain as a whole. Cost components in the supply chain that can be used to
structure measures and metrics reflecting financial performance include material
acquisition costs, total inventory costs, total logistics cost and the cost of information
technology used in the supply chain. Financial measures are an essential part of supply
chain performance evaluation as they confirm whether or not the strategies being
implemented at the level of the supply chain and of its member enterprises are being
successful (Brewer et al., 2000).
2.3.3 Supply Chain Operations Reference Model
The Supply Chain Council developed the supply chain operations reference model
(SCOR) to provide a standard for the management of supply chains across industries. By
placing the individual firm within the supply chain, it provides insights into additional
opportunities for a firm’s improvement. The application of the model requires the firm
not only to undertake an internal investigation but also to investigate its supply chain
15
partners and to communicate with them. According to Wisner et al. (2005) the SCOR
model identifies five key supply chain management processes.
Plan involves planning of demand and supply, establishing and communicating plans for
the supply chain and managing business rules, supply chain performance, inventory,
transportation and regulatory requirements. Source process covers sourcing of stocked,
make to order and engineer to order products including identifying and selecting
suppliers, assessing supplier performance, managing incoming inventory and supplier
agreements and authorising supplier payments. Make process involves executing make to
order and engineer to order products including scheduling production, producing, testing,
packaging, staging and releasing products for delivery and managing work in process,
equipment, facilities and the production network (Wisner et al., 2005).
Deliver covers managing orders, warehousing, transportation, delivery and installation of
all products, from enquiry and quoting to shipment and carrier selection, receiving,
picking, loading and shipping products, invoicing customers and managing import/ export
process requirements. Return process involves returning purchased goods to suppliers and
receiving finished goods returns from customers, including authorising and scheduling
returns, receiving and disposing of defective or excess products, returning replacements
of goods or credit and managing return inventories (Wisner et al., 2005). Plan process
covers the entire supply chain and is therefore undertaken by all entities in the supply
chain. The other four processes may be performed by each of the entities and linkages in
the supply chain at various levels of complexity Wisner et al. (2005).
2.3.4 Performance Prism
According to Harrison and Van (2002), different stakeholders of organisations within a
supply chain may have different views on what constitutes success and therefore use
different ways to measure it. Stakeholders include shareholders, employees, customers,
suppliers, the government and the communities in which the organisations operate.
Recognising that there are different organisations with different stakeholders in a supply
chain therefore implies that performance evaluation in a supply chain should not focus on
a single measure of success but rather on a range of measures. Emphasis has been on
financial measures based on past information while operational measures have often been
16
ignored. Out of this perspective, there has developed need for balanced measures that
encompass operational as well as financial measures and consider not just the past but
also the future (Harrison & Van, 2002).
The performance prism takes account of the perspectives of the stakeholders of
organisations within a supply chain. This way, performance measures that are relevant to
a particular supply chain can be identified. This view sees the purpose of organisations
within a supply chain as being to satisfy their stakeholders through the deployment of
relevant strategies, processes and capabilities. An organisation’s capabilities facilitate
processes that in turn underpin the strategies that it has adopted to satisfy its stakeholders.
In return for stakeholder satisfaction, firms will receive relevant contributions from their
stakeholders such as investment, labour, raw materials, income from sales among other
incentives. The relationship between and organisation and its stakeholders is therefore
multi-dimensional (Neely et al., 2002).
Stakeholder satisfaction involves identifying the need and demands of a firm’s
stakeholders. However, stakeholder contributions are also important as the relationship
between an enterprise and its stakeholders is reciprocal. Performance is therefore not
purely about satisfying the stakeholders’ needs but also about enhancing their
contributions to the firm (Neely et al., 2002).
2.4 Supply Chain Performance Indicators
2.4.1 Role of Performance Indicators
Business organizations need to capitalize on supply chain capabilities and resources to
bring products and services to the market faster, at the lowest possible cost, with the
appropriate product and service features and the best overall value (Gunasekaran et al.,
2001). Performance measures are important to the effectiveness of supply chain.
Companies can no longer focus on optimizing their own operations to the exclusion of
their suppliers' and customers' operations. There is an emerging requirement to focus on
the performance measurement of the supply chain in which company is a partner (Charan
et al., 2008). Interest on performance measurement has notably increased in the last 20
years (Taticchi et al., 2010). Companies have understood that for competing in
continuously changing environment, it is necessary to monitor and understand firm
17
performances. Measurement has been recognized as a crucial element to improve
business performance (Taticchi et al., 2010).
Different perspectives of supply chain performance measures (are cost and non-cost
perspective; strategic, tactical or operational focus (Gunasekaran et al., 2001); business
process perspective and financial perspective (Beamon, 1999). The earlier focus of
performance measurement was on financial perspective which is gradually changing to
non-financial perspectives. Most of the models have gone through some empirical testing
and some have only theoretical developments (Taticchi et al., 2010).
Performance metrics have three basic functions: control, communication and
improvement. Control means that the metrics enable managers and workers to evaluate
and control the performance of resources. The performance is communicated for internal
needs and external stakeholders by the metrics. Improvements mean the possibility to
identify gaps between performance and expectations and to identify the areas where work
is needed (Melnyk et al., 2004). Practitioners and specialists in the field of performance
evaluation generally agree that the key guidelines for developing a performance
evaluation system fall into two broad categories. Firstly, there is a philosophical
management perspective providing conceptual direction on how to think about a
performance evaluation system. Secondly, there is a pragmatic view emphasising the
nature of the measures and performance indicators (Holmberg, 2000)
2.4.2 Developing a Supply Chain Management Performance Evaluation System
Neely et al. (2005) defined performance measurement system as a balanced and dynamic
system that enables support of decision-making processes by gathering, elaborating and
analyzing information. Taticchi et al. (2010) further elaborated this definition by
commenting on the concept of ‘balance’ and ‘dynamicity'. ‘Balance’ refers to the need of
using different measures and perspectives that tied together give a holistic view of the
organization. The concept of ‘dynamicity’ refers instead to the need of developing a
system that continuously monitors the internal and external context and reviews
objectives and priorities.
Effective supply chain management has been associated with a variety of advantages
including increased customer value, increased profitability, reduced cycle times and
18
average inventory levels and even better product design (William et al., 2007). The
objective of supply chain performance management therefore has to facilitate and
enhance the efficiency and effectiveness of supply chain management. The main goal of
supply chain performance management models and frameworks is to support
management by helping them to measure business performance, analyze and improve
business operational efficiency through better decision-making processes (Tangen, 2005).
An effective, integrated and balanced supply chain performance management can engage
the organisation’s performance measurement system as a vehicle for organisational
change. Supply chain performance management can facilitate inter-understanding and
integration among the SC members. It makes an indispensable contribution to decision
making in supply chain management, particularly in re-designing business goals and
strategies, and re-engineering processes (Charan et al., 2008).
Under the conceptual framework, supply chain measurement should reflect a systems
approach. The supply chain must be regarded as an integrated system and must therefore
be measured comprehensively. It is therefore not correct to consider that supply chain
management performance can be measured by measuring only the performance of
individual functional areas and organisations involved in the chain. The performance
measurement system for the supply chain should have strategic issues as a basic point of
departure. It should concentrate on areas that are strategically important for all supply
chain participants and should measure these areas against common objectives. By
focusing on common objectives, managers in the supply chain will support the support
the supply chain’s overall strategies (Holmberg, 2000).
A performance measurement system should be derived from the company’s objectives.
Otherwise, the performance measurement system may support actions that have the
opposite effect of those implied in the strategy (Tangen, 2004). A performance
measurement system ought to consist of various types of performance measures covering
all important aspects agreed as representing the success of a company. There must in turn
be a balance between the various performance measures in the performance measurement
system. A performance measurement system should be appropriately focused on short-
and long-term results, different types of performances (e.g. cost, quality, delivery,
flexibility and dependability), various perspectives (e.g. the customer, the shareholder,
19
the competitor, the internal and the innovativeness perspective), and various
organisational levels (e.g. global and local performance).
As performance evaluation systems for the supply chain evolve, more and more emphasis
is placed on an approach that balances quantitative and qualitative measures including
financial and non-financial measures. However, financial measures are criticised for their
lack of forward looking approach by emphasising on past performance. Non-financial
measures provide a broader perspective on performance evaluation. In designing a
performance evaluation system for supply chain management, it cannot be measured by
evaluating outputs and outcomes alone. It is essential to also evaluate the processes that
generate these outputs and outcomes. In addition, the performance management system
must always be designed with the customer in mind as it is the customer’s perception that
is the ultimate test of supply chain performance (Holmberg, 2000).
2.4.3 Practical Determination of Performance Areas and Indicators
According to Beamon (1999), a supply chain measurement system must place emphasis
on three separate types of performance measures: Resource measures (generally costs);
Output measures (generally customer responsiveness); and Flexibility measures (Ability
to respond to a changing environment). Each of these three types of performance
measures has different goals and purpose. Resource measures include: inventory levels,
personnel requirements, equipment utilization, energy usage, and cost. Output measures
include: customer responsiveness, quality, and the quantity of final product produced.
Flexibility measure a system's ability to accommodate volume and schedule fluctuations
from suppliers, manufacturers, and customers (Beamon, 1999).
In determining the nature of performance areas to be used, a family of measures should
be used that are limited and linked to each other. Performance measures that are not
linked provide a disjointed view of actual performance and may result in a narrow and
often sub-optimal view of performance in key areas. The measures should also reflect
process performance taking into consideration the causal relationship between the results
and the drivers that produce these results. Inter enterprise measures also need to be
developed to measure performance in these supply chain processes that cut across
20
linkages (Lapide, 2000).
2.5 Chapter Summary
In this chapter, the complexity of performance measurement at the levels of an integrated
supply chain has been revealed. In spite of the difficulties resulting from this complexity,
it is essential to evaluate performance. Furthermore, performance evaluation is also a
useful tool in managing the interrelationships and linkages throughout the supply chain.
Some guidelines for structuring a valid performance evaluation system for managing a
supply chain have been provided and at the same time emphasised the fact that supply
chains are generally unique and should therefore be evaluated by using only measures
and norms valid and applicable for the specific supply chain. Three of the most
commonly used performance evaluation systems have been briefly discussed to provide
insight into current approaches to supply chain performance evaluation.
The next chapter provides the research methodology by identifying, defining and
providing justification for the research design used in the study along with the data
collection tools used. Chapter four shows the results and findings from the data analysis
described in this chapter. Chapter five discusses the findings of the study based on the
objectives provided and presents conclusion as well as recommendations for further
study.
21
This chapter identified, defined and provided justification for the research design used in
the study. The data collection instrument and population were identified along with
sampling frames, techniques, the size of the sample for the study and the data analysis
methods were defined.
3.2 Research Design
According to Silverman (2000), before conducting research, it is crucial to set out the
research approach as well as the related concepts, theories, methodologies and methods.
In this study, there are two methods of research approach that are linked to the methods
used. They are quantitative and qualitative research approach. These differed in many
aspects and depended on a number of issues such as the research objective and methods.
Quantitative approach produces results in broad term and entails collection of numerical
data (Bryman, 2004). Quantitative approach put emphasis on measurement and analysis
of casual relationships between variables and not processes (Denzin & Lincoln, 2005).
However, this study did not seek to establish a cause effect relationship between the
stakeholders related to supply chain performance measurement factors. Quantitative
approach was not considered appropriate for this study as the intention was to gain insight
in a natural setting based on respondents understanding the supply chain partnership with
little interest in seeking representativeness. For this study, qualitative approach was most
suitable to the research objectives. The approach to enquiry was adopted as the
researcher’s position suggests that people’s knowledge, views, understanding,
interpretation, experience and interactions are meaningful properties of the social reality
which the research objectives are designed to explore (Mason, 2002). The research
entailed views and opinions of supply chain practitioners about their supply chain
activities and the performance of their supply chain. Since this thesis aimed at
performance evaluation of supply chain which highly differed and depended on the
22
individual companies and branches, a qualitative approach was chosen due to the wide
variety of expected results.
In qualitative research, a large amount of information and data is gathered. To organise
the work and handle the collected data, researchers should divide it into different
categories or topics to simplify the process (Bryman, 2004). In this study, the information
collected was separated into general information about supply chain management and
specific information about supply chain performance measurement. This differentiation
allowed to distinguish the different knowledge levels of the participants about supply
chain management and offered the opportunity to let the participants become familiar
with the general topic before answering more questions in detail. Furthermore, the
specific part was divided into general and detailed questions concerning supply chain
performance measurement problems and challenges.
3.3 Population and Sampling Design
3.3.1 Population
A population is the collection of elements about which we wish to make some inferences
(Copper and Schindler, 2001). It can also be described as a collection of data that
describes some phenomenon of interest (Quang and Hong, 2003). The population in the
study comprised of participant’s in various healthcare supply chain organisations. It
consisted of 6 major categories of programs run; the project’s senior management
consisting of directors, managers overseeing supply chain services and outsourced supply
chain services partners that were the main drivers in the supply chains. The target
population was as shown on Table 3.1:
Table 3.1 Target population
Segment Target Population Percentage
Program implementers 25 29
Project managers 45 44
Total 90 100%
3.3.2 Sampling Design
A research sampling design is that part of the research plan that indicates how cases are to
be selected for observation (Polonsky and Waller, 2005). The design therefore maps out
the procedure to be followed to draw the study’s sample.
3.3.2.1 Sample Frame
The sampling frame for this study was drawn from a list of clients served, their senior
management teams, sub-contractors engaged and program managers. A sampling frame is
a representation of the items available to be chosen for a sample (Porkess, 2004). A
sample is a subset of data selected from a population (Quang and Hong, 2003). The
sample of the study focused on key contact persons that had good experience in the
supply chain process and those that handled the project at a substantial magnitude. The
basic idea about sampling is that by selecting some of the elements in a population, we
may draw conclusions about the entire population (Cooper and Schindler, 2001). Thus, it
is an accurate representation of members of the population.
3.3.2.2 Sampling Technique
The study used judgemental sampling to choose respondents. A judgemental sample was
obtained according to the discretion of someone who is familiar with the relevant
characteristics of the population. In this case, since the researcher is involved in the
healthcare industry, samples are selected to the best of his judgement.
Judgemental sampling to be used in this study provides an effective way of obtaining
views from different players in the healthcare supply chain so as to make a holistic
evaluation on the effectiveness of supply chain performance measurement in the
healthcare supply chain. This sample was chosen because it helped to increase a samples’
statistical efficiency to provide adequate data for analysing the various subpopulations
and to enable different research methods and procedures to be used in different strata
(Cooper & Schindler, 2001).
3.3.2.3 Sample Size
The choice of sample size is governed by the level of certainty that the characteristics of
the data collected will represent the characteristics of the total population, the margin of
error that is tolerable, the type of data analysis that will be performed and lastly, the size
of the total population (Saunders et al., 2000). With an expected 100% response rate, 10%
margin of error and 95% level of significance and an assumption of 80% that the sample
will have the specified attribute that is being explored, the minimum calculated sample
size for different players in the healthcare supply chain was about 72 out of a population
of 90. Table 3.2 below shows the distribution of sample size for the various players in the
healthcare supply chains.
Category Sampling Frame Sample size
Program implementers 25 20
Project managers 45 36
Total 90 72
3.4 Data Collection Methods
Methods of data collection are the ways to obtain relevant qualitative and quantitative
data or information for a particular study from the relevant sources (Sekaran, 2003).
Primary data collection method was used in this research. Primary data is sought for its
proximity to truth and control over error (Cooper & Schindler, 2001). Data was collected
using a questionnaire developed using guidance of the research questions. A
questionnaire was used based on its advantage of economy of time and relative cheapness
in terms of expense. The types of questions were a mix of open and closed end.
The questionnaire was divided into 5 parts. The first part had a general overview of the
respondents in relation to the contexts of the research, the second part focused on
analysing the extent to which integration of the supply chain was achieved, the third
focused on the approaches that were used to analyse performance of the supply chain, the
25
fourth part focused on indicators that could be used to inform supply chain performance
and the final part provided a few open ended questions to the respondents. The
questionnaire was structured and the respondent was guided by the interviewer through
illustrated answers to ensure that the respondent understood them well and answer them
sufficiently. To maximise response rates, validity and reliability of the questionnaire, the
questions were made clear, accurate and simple. The respondents also received a cover
letter explaining the purpose of the study and to ensure confidentiality.
3.5 Research Procedures
3.5.1 Pilot testing of the Questionnaire
A questionnaire was developed to address the objectives of the research. Pretesting was
done by issuing the questionnaires to twelve respondents. Three questionnaires were
developed for each of the programs served. Pretesting was done to ascertain suitability
before they could actually be issued for acquisition of information. This enabled fine
tuning of the questionnaire for objectivity and efficiency of the process, time taken to
complete the questionnaire, clarity of instructions, unambiguous questions, and
attractiveness of layout and relevance of questions. Contents, format, layout, and
administrative procedures of the questionnaire were then modified accordingly.
3.5.2 Administration of the Questionnaire
Questionnaires were administered to clients served in the partner Organisations. The
questionnaire was estimated to take twenty minutes to complete. The questionnaires were
administered by the researcher who conducted interviews and assisted the respondents to
fill in the questionnaires. Confidentiality was assured and for respondents who wanted a
summarised copy of the findings, an opportunity was provided to request. The researcher
attended post-meeting sessions being held with the partner organisations accompanied
with the research questionnaires to administer, interview and clarify on any issues that
arose.
26
The data collected was qualitative. Qualitative research approach with standardized open-
ended interviews was used in this study. This procedure was expected to generate
valuable and sufficient findings for the study.
3.7 Chapter Summary
This chapter looked at the methodology that was used in carrying out the study. It
examined descriptive research as the type of design that was used in the study which
focused on measuring and evaluating performance of a supply chain. The section
provided sample frames, techniques and sizes that were used. The use of a questionnaire
as a data collection method was illustrated. The questionnaire developed was pretested
before being issued to respondents.
The next chapter, chapter four, shows the results and findings from the data analysis
described in this chapter. Chapter five discusses the findings of the study based on the
objectives provided and presents conclusion as well as recommendations for further
study.
27
4.1 Introduction
This chapter analyses the findings and results from the data collected. The results are
divided into four major subsections that include general information of the respondents,
factors influencing integrated supply chain management, supply chain performance
evaluation approaches and key performance indices related to supply chain management.
This chapter makes use of quantitative and descriptive statistic to present data gathered
from the field. The data was presented mainly in frequency and percentage tables touched
on management experience of the respondents in healthcare sector as well as on the area
of study such as integration of supply chain, approaches in evaluation of supply chain
performance and key performance indices crucial in determining the performance of the
supply chain.
4.2 General Information
The study utilized respondents who were key staff and partners in the healthcare supply
chain programs run by Phillips Healthcare Services Limited. The background information
on programs, gender, experience and qualifications of the respondents were looked into.
This section provides information relating to the healthcare program, job description of
the staff, the years of experience in healthcare sector and level of academic qualification
and skills. The response rate achieved for the study was 80%
4.2.1 Program
Respondents were selected from various partners working with health care service
providers in Kenya catering for donor funded supply chain programs. As shown in Table
4.1, 27.8% of the respondents interviewed were from program implementers mainly
comprising of non-state actors, 50% comprising of project managers who ran the various
program’s supply chain operations and 22.2% of supply chain partners who were mainly
outsourced under third party logistics (3PL) structure. The highest number of respondents
was from the project managers because of the various programs having managers charged
in carrying out activities contracted by the program implementers.
28
4.2.2 Job Description of Respondents
This study examined the occupation and designation of the respondents so as to
determine what their role in the healthcare program was. The study showed that 27.8% of
the respondents were supervisors, 52.8% were managers and 19.4% were directors. The
job level that a respondent was at would help in determining what his or her response
would be because they are involved with the relevant decision making process at different
stages of the supply chain. These results are indicated in Table 4.2.
Table 4.2: Job Description of the Respondents
Frequency Percent
4.2.3 Gender
Out of 72 respondents, 58.3% were males and 41.7% were female as shown in the Table
4.3. This indicates that there were more male healthcare supply chain workers than there
are females in the supply chain programs. A possible explanation for the higher number
of males could be because of the nature of the profession and interest in supply chain
management which determine their careers.
29
Frequency Percent
4.2.4 Experience in Healthcare Sector
This study examined the length which the respondents had been involved in the
healthcare sector. The length of experience in healthcare would help know if they were
conversant with the local health policies governing the sector. It would also help
determine how conversant the respondents were with changes they would want to see
being implemented in the sector. The results of the study showed that 6.9% had less than
two years experience, 15.3% of the respondents had experience of between 3-5 years,
50% of the respondents had 6-8 years experience and 27.8% had over 9 years experience
as shown in Table 4.4. This showed that a large proportion of the respondents had good
experience in the healthcare sector and could report accurately about the healthcare
program and trends in the industry.
Table 4.4 Experience of Respondents
Frequency Percent
3-5 years
6-8 years
4.2.5 Level of Academic Qualification
This study examined the levels of academic qualification of the respondents so as to
determine the quality of contribution in management of the programs. The level of
academic qualification showed that the largest proportion had bachelor’s degree at
54.2%, 18% had attained master’s degree qualification and 27.8% had diploma
30
qualifications as shown in Table 4.5. The result of this study showed that most
respondents were suitably qualified and were able to make good decisions on matters
relating to the supply chain programs.
Table 4.5 Level of Academic Qualification
Frequency Percent
4.3 Integrated Supply Chain Management
This section presents findings on the role of supply chain management integration in the
healthcare sector as obtained from the respondents. It presents information about the
involvement of the supply chain partners in the management of various interrelated
supply chain processes and decision making responsibility of key staff involved in the
programs.
4.3.1 Supply Chain Opportunities and Development of Implementation Plans
A 100% of the directors, 100% of managers and 85% of supervisors felt that they were
involved in the process of assessing supply chain opportunities and developing
implementation plans for the programs as shown in Table 4.6.
Table 4.6: Assessment of Supply Chain Opportunities
Job description Total
Director Manager Supervisor
opportunities
no 3 3
31
4.3.2 Development of Supply Chain Vision
The majority of the respondents (100%), as shown in Table 4.7, felt that senior
management of the partner organisations were involved in developing a desired supply
chain vision for the programs run. They felt that senior management played an important
role in providing a vision that guided them on their specific organization’s goals and
strategies on how they plan to identify and realize the opportunities.
Table 4.7: Respondents Opinion on Senior Management Involvement in Visioning
no
4.3.3 Development of Performance and Evaluation Strategies for Supply Chain
among Partners
Most respondents replied that partners played an important role in evaluating and
providing feedback on the specific organization’s performance and that there have been
initiatives to improve processes carried out; 80% of the less than two years, 63.6% of the
3-5 years, 88.8% of the 6-8 years and 90% of the 9 years and above said that there was
good involvement in this strategy process as shown in Table 4.8.
Table 4.8: Development of Supply Chain Strategy by Partners
Experience Total
Less than
2 yrs
development and implementation
32
4.3.4 Benchmarking
Many respondents felt that the programs run were well benchmarked and responsive to
the needs of the healthcare sector concerned. As shown in Table 4.9, 70% of supervisors,
92.1% of managers and 92.8% of directors felt that their sectors was well benchmarked
with trends in the industry and that the programs had a responsive system in place to
address needs of the population in the sector concerned.
Table 4.9: Benchmarking and Responsiveness to Market Needs
benchmarking and developing responsive
no 1 3 6
4.3.5 Partner Involvement in Supply Chain
Most respondents agreed that various partners were involved in sessions or meetings on
matters relating to the supply chain’s problems solving, planning and in provision of
solutions to the supply chain processes. 90% of supervisors, 97.3% of managers and
92.8% of directors of the programs agreed that stakeholders were adequately involved in
joint planning sessions as shown in Table 4.10. Partners involved healthcare
professionals, pharmacists, officials of health ministry and sub-contracted transporters.
Table 4.10: Partner Involvement in Joint Planning Sessions
planning sessions for the supply chain
yes 13 37 18 68
no 1 1 2 4
Total 14 38 20 72
33
4.3.6 Quality Management Systems
Most respondents agreed that there was a quality management system that was in place to
guide the supply chain processes carried out between partner organisations. 100% of all
respondents said that there was a quality management system in place. This was mostly
through the development and implementation of standard operating procedures and
pursuance of quality management standards by the partner firms. This is shown in Table
4.11.
guides work and relations amongst partners
yes 14 38 17 69
no 0 0 3 3
Total 14 38 20 72
4.3.7 Effectiveness of Partnership Structure
Many of the respondents were in agreement that the various partners had organisational
structures that could be easily identified and key staff in the various programs was easily
identifiable; Table 4.12 shows that 85% of supervisors and 100% of managers and 100%
of directors said that there was a clearly developed structure to guide partnership and its
relations between the supply chains.
Table 4.12: Partnership Structure in Place
guides work and relations amongst partners
yes 14 38 17 69
no 3 3
34
4.3.8 Information Sharing and Communication in Supply Chain
Most of the respondents agreed that there was an adequate communication network in
place to support the supply chain decision making process. Table 4.13 shows 90% of
supervisors, 92.1% of managers and 85.7% of directors said that they were satisfied with
the communication and feedback mechanisms in place for their respective supply chains.
Table 4.13: Information Sharing and Communication Network in Place
Strongly
4.3.9 Stakeholder Involvement and Commitment to Change
Most of the respondents were of the opinion that the stakeholders were actively involved
and committed to change in the various supply chain programs; 86.8% of managers,
92.8% of directors and 75% of supervisors said that their organisations leadership were
actively involved and address change management issues as shown in Table 4.14.
Table 4.14: Stakeholder Involvement and Commitment to Change
Stakeholder involvement in
making change
agree
strongly
agree
1
13
5
33
15
6
61
35
This section presents findings on supply chain performance evaluation approaches as
obtained from the respondents. It presents information about the involvement of the
supply chain partners in the management of performance of supply chain and relates the
information based on customer service, innovation and learning and internal business
factors in managing their supply chains.
4.4.1 Measuring Supply Chain Performance
Ninety percent (90%) of program implementers, 86.1% of project managers and 81.2% of
supply chain partners strongly felt that measurement of their supply chains’ performance
helped in better managing their supply chain as shown in Table 4.15.
Table 4.15: Measuring Supply Chain Performance can help Manage Supply Chain
Respondent Total
Strongly
4.4.2 Supply Chain Performance Evaluation Approach
In discussions held on performance management approaches, 75% of program
implementers, 91.6% of project managers and 93.7% of supply chain partners were
indifferent as to whether there was a performance evaluation model that had been
developed for their specific programs as shown in Table 4.16. Directors and managers
were aware of performance measurement approaches applicable but had not specifically
identified particular one in use.
36
4.4.3 Balanced Score Card Performance Model
Most respondents were neutral as to whether they were familiar with the balanced
scorecard supply chain performance model. This was offered by 57.1% of directors, 71%
of managers and 90% of supervisors who were neutral as shown in Table 4.17.
Table 4.17: Program Familiarity with Balanced Score Card Performance Model
card supply chain performance
neutral
agree
strongly
agree
8
6
0
27
4
2
18
2
0
53
12
2
4.4.4 Stakeholder Perspective on Supply Chain Performance
Directors and managers would most likely be in contact with stake holders in the various
programs; 85.7% of directors, 84.2% of managers and 80% of supervisors strongly
37
agreed that stakeholders played a critical part in informing their supply chain as shown on
Table 4.18.
chain has been used to inform the
performance of our supply chain program.
Agree 2 6 4 12
Strongly
4.4.5 Customer Perspective
100% of directors, 100% of managers and 95% of supervisors were of the opinion that
customer concerns were considered in their supply chains. As most were donor funded,
getting drugs and health related supplies to customers cheaply, responsively and in
continuous supply was their major area of focus in the supply chain cycles as shown in
Table 4.19.
to evaluate how the supply chain could
add value for the customers.
yes 14 38 19 71
no 1 1
4.4.6 Internal Business Perspectives
90% of project implementers and 97.2% of project managers felt that there were well
defined internal business objectives that had been set and were reviewed on a regular
basis to inform their supply chain activities as shown in Table 4.20.
38
4.4.7 Balanced Score Card Perspectives and Interrelationships
The largest proportion of respondents, 85.7% of directors, 94.7% of managers and 70%
of supervisors felt that various aspects of the balanced scorecard helped in making better
decisions in their various activities as shown in Table 4.21.
Table 4.21: Balanced Score Card Perspectives and Decision Making
help understand interrelationships
yes 12 36 14 62
no 2 2 6 10
Total 14 38 20 72
4.4.8 Customer Relationship Management Perspective
There was a general feeling that good relationship management between partners was key
in making decisions relating to forecasting demand and sourcing activities for their
supply chain concerns. 78.9% of managers, 92.8% of directors and 75% of supervisors
strongly agreed on this as shown in Table 4.22.
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chain in conducting joint market
analysis and demand forecasting.
Strongly
agree 13 30 15 58
Total 14 38 20 72
4.4.9 Innovation and Learning Perspective
90% of program implementers, 88.8% of project managers and 81.2% of supply chain
partners strongly felt that innovation and learning activities had played a key aspect that
helped improve the performance of their supply chains as shown in Table 4.23.
Table 4.23: Innovation and Learning and Influence on Quality Improvement
cooperation among supply
Strongly
agree 18 32 13 63
Total 20 36 16 72
4.4.10 Procurement and Information Management
92.8% of directors, 91.6% of managers and 94.4% of supervisors responded that they
were satisfied with the procurement process and information sharing along their supply
chains as shown in Table 4.24.
40
director manager supervisor
process has been developed to ensure
effective communication with suppliers
4.5 Performance Indicators
This section presents findings on supply chain performance indicators as obtained from
the respondents. It presents information about the performance indicators that the
respondents felt important in managing their supply chains.
4.5.1 Provision of Order Entry and Information Exchange with Customer
100% of respondents agreed with the view that customer related information was
provided by each of the partners along the supply chain as shown on Table 4.25.
Table 4.25: Providing Information to customers
Respondent Total
entry and information exchange
Strongly
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4.5.2 Technical Support and Solving Problems
Most respondents felt that technical queries were adequately addressed by their partners.
90% of program implementers, 91.6% of program managers and 87.5% of supply chain
partners responded that technical queries received were adequately addressed as shown
on Table 4.26.
Table 4.26: Provision of Technical Support and Problem Solving Excellence
Respondent Total
customers.
agree
strongly
agree
18
2
33
3
14
0
65
5
4.5.3 Flexibility of Service
92.8% of directors, 88.8% of managers and 70% of supervisors responded that their
supply chain partners were flexible in meeting customer needs as shown in Table 4.27.
Most processes involved depended on others in the supply chain and were able to adapt to
changes that occurred and respond to customers flexibly to meet their expectations
Table 4.27: Flexibility to Meet Customer Needs
customer’s needs.
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4.5.4 Quality of Delivery Documentation
Ninety five percent of program implementers, 91.6 % of project managers and 93.7% of
supply chain partners were of the opinion that delivery documentations generated and

Documents

Ndiba Kamau - Research Report - Measuring and Evaluating