Completing SPM Project Planning Phase Activities

Objectives

After completing this lesson, you will be able to:

Explain the purpose of the planning phase in an SPM project.
Describe surveys, scorecards, and KPIs.
Explain master documents.

SPM Planning Phase: Overview

Plan for project
Prepare master documents
- Survey
- Scorecard
- Other
  - Corrective action model
  - Results summary
Master document review
Supplier kickoff

Note

SAP Ariba Best Practice: Always involve the supplier even in helping determine KPIs and Survey questions. Supplier participation is key to success.

In the planning phase, you perform a number of tasks in preparation for the actual performance reviews, which occur on a recurring basis. Two key tasks are the preparation of the tools to be used in the performance review: the scorecard and the survey. There may be other tasks in your company’s process, such as a review task for the final version of the survey and scorecard.

When the scorecard was designed, the template creator worked with others in your organization looking for broad indicators of performance called Key Performance Indicators (KPI). Once our company has decided what the KPIs are, you build a more detailed way of telling whether these KPIs are being met. These details can be collected a number of ways, the most common of which is a supplier survey and another is through reporting.

In the planning phase, you decide on performance targets and goals for the supplier. It is recommended that you discuss those targets with the supplier so they are aware of what they are being measured on. Based on those decisions, you create the Master Scorecard and Master Survey so that they can be used in the recurring phase. In the case of the scorecard, there should be very little to do. For the survey you set up the rules such as timing – how long will the survey stay open. You also include the participants and review the content.

Finally, according to your company’s process, you might have the survey and scorecard reviewed by a stakeholder. It is a best practice to involve the supplier in the planning phase of the performance review.

SPM Survey: Overview

Tool used to collect information
Surveys have many uses
- Linked to Scorecard KPIs (Performance)
- Stand-alone Surveys
Survey setup: rules, participants, content
- Who determines Survey Content?
- Qualitative or quantitative questions
Period survey(s) based on Survey Master
Surveys can be edited

A survey allows for polling and data collection from stakeholders and can include the supplier as well as numerous internal participants. The survey is usually the tool for collecting subjective information in support of the KPIs in the scorecard. The scores from the survey are generally linked to the scorecard, but surveys can have other uses, including collecting skills, risk or financial information and can be internal only or external (supplier) or both.

The survey has 4 sections.

First, are the rules: How long does a survey stay open?
Next, are the participants: Who gets to respond to the survey?
Third, is the survey content: What questions are asked?
The final section is a summary.

During the Planning phase, the survey is saved in preparation for use in the Monitoring or recurring phase. The survey content in the Planning phase comes from the template selected when creating the project. Usually a group of subject matter experts provide input to the template creator to determine the content of the survey.

A survey can ask how well a supplier is doing at meeting a particular goal and the answer choices can either be quantitative or qualitative.

A survey can ask how well a supplier is doing at meeting a particular goal and the answer choices could be "Excellent", "Meets Expectations" or "Poor". These are called qualitative answers which are graded based on the answer. For example "Meets Expectations" could be a score of 85. Survey answers could also be numeric, for example "Please enter the customer satisfaction survey result on a scale from 1 – 100" and you would be expected to put in a numeric answer. This answer could be translated into a score, such as 85 or the raw number could be used for overall performance. These type of questions are called quantitative.

SPM Scorecard: Overview

Tool used to summarize performance
- Key Performance Indicators (KPI)
- Informational Scorecard Items
- Who determined the Scorecard content?
- Period Scorecard based on Scorecard Master
KPI values are based on
- Survey scores
- Values from Reports
- Data as entered
Scorecards can be edited

Note

SAP Ariba Best Practice: Standardize KPIs across Commodities, Regions and Suppliers in order to improve analysis of results.

Scorecard

A scorecard is a tool used to track and summarize how well a supplier is performing. A scorecard contains KPIs, but can also include comments about the supplier, a general supplier description, or an issue resolution plan. It may also track measures that are not necessarily indicators of performance, but good information to know, such as the number and value of active contracts. The scorecard content in the Planning phase comes from the template selected when creating the project. Usually a group of subject matter experts provide input to the template creator to determine the content of the scorecard. It is a best practice that these KPIs be common across all suppliers, commodities and regions in the company during the performance period so that comparisons and trending can be made. This planning phase scorecard is then used as a Master for the recurring phase that we’ll discuss later.

KPIs can be based on surveys that collect predominantly subjective information about the supplier but can also be based on transactional data pulled from analytical reports. KPIs can also be set up so that a value can be manually entered, frequently as derived from another system, such as a defect monitoring system.

KPIs can be single lines or can be organized into scorecard sections where the different types of KPIs can be mingled with the informational items. For each KPI, you can set a weight compared to other KPIs and a target grade for minimum expected performance. Modifications to the scorecard will be covered in a later module.

SPM Planning Phase: Master Documents

Master Documents

During the Planning phase, you work with master documents. That means you are customizing the scorecard and survey pulled from the SPM process template. The master documents work as templates for a specific SPM project. Every recurrence the system will use those master scorecard and master survey to create a scorecard and a survey for specific time period. Master documents cannot be published and should not capture any data. You can easily recognize master scorecard and survey – they will not have a date in the Name. Scorecards and surveys with data, run for a specific period of time, have month and year after the name assigned by the system.

If you make changes to the master scorecard or master survey, they will be reflected in all future scorecards and surveys, but will not affect already created scorecards and surveys. So if you make changes during the planning phase, all scorecards and surveys in this SPM project will inherit the changes.