Supplier performance measurement in Johnson & Johnson

Filed in archive Research on February 10, 2008

I usually screen a number of supply chain related publications once per week to see what is being written by the other members of SCM community. Yesterday I saw an interesting graph in Supply Chain Digest which was borrowed from MIT Sloan Management Review.

The graph is related to the performance management in johnson and johnson. Over there, The metrics, responsibilities and the performance reports are prepared mutually (between suppliers and J&J). The process is illustrated in the figure below.




The advantage of this way of working is that the parties on both sides can see in a transparent way what is going on and if the other party has performed up to its commitment or not.

The other advantage is that since the targets are set mutually, they are more realistic.

I thought maybe this process would be the next paradigm in the supplier performance measurement thinking.